Canadian Underwriter

Canada not likely to impose international levy on financial institutions

April 5, 2010   by Canadian Underwriter

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Britain, Germany and France, and possibly the United States, are moving towards implementing an international levy on banks to fund potential ‘bail-outs’ of the financial system in the event of another crisis in the future.
But Canada is not likely to join the list, reports The Vancouver Sun.
Germany and France introduced on Mar. 31 a proposal to impose a levy on banks. The amount charged would depend on the risks involved in the business of the institute and on its size, a release from the German government says.
“In this way, the German government intends to ensure that the banks make their own provisions for future crises,” the German government release says. “In the future, a Stability Fund is to finance restructuring and liquidation procedures. This fund will be financed by a special levy imposed on banks.”
Some reports say the French government would consider a similar levy on hedge funds and insurers. 
In January, U.S. President Barack Obama proposed a similar tax, the Financial Crisis Responsibility Fee, in an attempt to recoup taxpayers’ money used to rescue the financial system during the financial crisis.
“In the U.K., there are very constructive discussions going on, as there are in the U.S.,” German Chancellor Angela Merkel said in the government release. “There is a high level of agreement.”
But not so in Canada, the Vancouver Sun reports.
“I have not seen that consensus forming,” Canadian Finance Minister Jim Flaherty told The Vancouver Sun. “We are not going to impose a bank tax in Canada.”

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