Banks around the world could face two new taxes to cover the cost of any future bailouts, under proposals by the International Monetary Fund circulated to Group of 20 countries this week.
Chancellor Alistair Darling immediately welcomed the report, commissioned by the G20 last year, saying banks have to make a contribution to the society in which they operate: "We want proposals agreed as soon as possible," he said.
The interim report proposes a "Financial Stability Contribution," which would be used to cover the cost of any future support needed by banks.
Most likely revenue collected would be paid into a bailout fund that could end up being some 2-4 per cent of a country's gross domestic product. The IMF also left the door open for the tax revenue to go directly into national budgets.
All financial institutions would have to pay, first at a flat rate. But the levy could be refined over time to make most risky organisations pay proportionately more.
The IMF also proposed a further tax on the financial sector that is designed to pick up additional revenue, which recognises that banks benefit from being part of a wider society - The "Financial Activities Tax" - or a fat cat tax - would be levied on the sum of the profits and remuneration of financial institutions. This would be paid into national budgets. A source said it could raise something like 0.2 to 0.4 per cent of GDP.
