Banks face more tax pressure

Banks looked to set to come under increased financial pressure as debate opened over the weekend on the subject of new taxes for the sector.

Paul Tucker, deputy governor of the Bank of England, proposed that banks should be charged a levy to help pay for bail outs during future financial crises.

He outlined the idea in a speech to the Institute of International Finance in Istanbul.

He is quoted in The Times today saying: “When things get really bad unfortunately the only part of the economy that can provide capital is the fiscal authority. But that does not necessarily mean that the cost of providing that should fall on the general taxpayer.”

Tucker’s comments came just days after it emerged that International Monetary Fund was looking at the possibility of a world-wide tax on banks to compensate for state aid during the crisis.

Both ideas further the argument triggered by Adair Turner when he publicly discussed the idea of a Tobin tax – or a tax on all bank transactions. He said applying special taxes to pre-remuneration profit was one way of reducing the size and influence of a particular sector.

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International bank tax mulled