Higher taxes will keep banks in line: Turner

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

`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.

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