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4/6/10

Europe Finance Chiefs to Discuss Tax on Bank Leverage, EU Says - by Jones Hayden

European Union finance chiefs next week will discuss a tax on bank leverage and risk-taking that could generate as much as 50 billion euros ($67 billion) a year for the region's governments, the EU said.

The prospective balance-sheet levy is among "innovative financing options" that the European Commission, the EU executive in Brussels, is analyzing in preparation for a meeting of EU finance ministers and central bankers on April 16-17 in Madrid. A separate levy on financial transactions, a so-called Tobin tax, could bring in up to 20 billion euros, according to the EU analysis.

"The financial sector needs to contribute to the costs of financial stability," EU Financial-Services Commissioner Michel Barnier said in a statement today. "This should be one of the building blocks in our effort to set up a crisis-management framework in Europe."

Revenue from such measures could be used toward the cost of future financial crises, as well as to strengthen public finances, the EU said. European governments are struggling to boost revenue and cut costs as they try to tackle budget deficits swelled by the stimulus measures used to combat the worst recession in more than 60 years.

For more:  Europe Finance Chiefs to Discuss Tax on Bank Leverage, EU Says


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