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27 Aug 2009
The Financial Services Authority chief has raised the possibility of higher taxes in the financial sector as a means to curb stratospheric profits and excessive bonuses.
Lord Adair Turner told Prospect magazine that new `special taxes' on transactions was one way to reign in the sector, Reuters news agency reports.
`If you want to stop excessive pay in a swollen financial sector you have to reduce the size of that sector or apply special taxes to its pre-remuneration profit,' he said.
Critics warn that legislating to prevent high bonuses will threaten London's position at the centre of the global financial regime.
Turner said maintaining London's status was not high on his list of priorities.
`Higher capital requirements against trading activities will be our most powerful tool to eliminate excessive activity and profits,' he said.
`And if increased capital requirements are insufficient I am happy to consider taxes on financial transactions -- Tobin taxes.'
Tobin taxes refer to government charges on financial transactions.
Further reading: FSA may levy higher City tax
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Briefings
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Visitor comments Add your comment
How to increase lending
Great strategy. When lending by banks to customers needs to increase - HEY, lets tax banks more!
One assumes the bright spark who suggested this works for the Public sector - and not in the commercial world?
Posted by: Alun, 27 Aug 2009 | 00:00
Bankers pay
The problem arises because the Directors of the banks reward their employees at the expense of their shareholders. Pre remuneration pay should be divided into 3 pots - employees, shareholders and retentions. In recent years the proportion allocated to employees has grown at the expense of the other 2 categories. It is the responsibility of all shareholders, including the government, to ensure that the Directors restore a more fair distribution of the rewards for enterprise. If they do not do this they (the Directors) should be sacked
Posted by: John S, 27 Aug 2009 | 00:00
Bankers pay
The problem arises because the Directors of the banks reward their employees at the expense of their shareholders. Pre remuneration pay should be divided into 3 pots - employees, shareholders and retentions. In recent years the proportion allocated to employees has grown at the expense of the other 2 categories. It is the responsibility of all shareholders, including the government, to ensure that the Directors restore a more fair distribution of the rewards for enterprise. If they do not do this they (the Directors) should be sacked
Posted by: John S, 27 Aug 2009 | 00:00
Tobin or not Tobin
London as a financial centre is not high on FSA priorities!!! Hello New York, farewell billions of UK corporation tax. Do they not realise how simple it is to divert a transaction from UK to USA or anywhere for that matter.
Posted by: N Ewbox, 27 Aug 2009 | 00:00
spelling
rein not reign
Posted by: Phil Rees, 01 Sep 2009 | 00:00
HIGHER TAXES WILL KEEP BANKS IN LINE: TURNER
Does any government or private sector organisation have the following figures:
The ratio of "City" salaries plus bonuses against the taxes raised from this sector vis a vis the general "working population's cost and taxes paid
Posted by: Rexford J. Ladd, 04 Sep 2009 | 00:00
Merchant bank profits
Surely simpler would be for merchant bank customers to demand lower commissions on their trades.
25% Charges on a hedge transaction for example.
That way the non-dom bankers do not take their fees overseas
and the UK companies have higher profits
to pay CT on ....
Why DO people accept 3% commission on all share transactions - when the whole system is automated?
That is why the banks/bankers make such huge profits.
Posted by: Eleanor, 16 Sep 2009 | 00:00