Coalition Government launches consultation document on Bank Levy
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Issued13 July 2010 Treasury
Financial Secretary to the Treasury, Mark Hoban MP, today launched a
consultation document on the Bank Levy. The document sets out issues around
technical aspects of the design and implementation of the Bank Levy. This
consultation exercise will help to ensure that the Levy is designed in a way
that best meets its objectives, including ensuring the compliance costs faced by
firms are minimised.
It is proposed that draft legislation will be published in the autumn to
allow for further comments from stakeholders. Final draft legislation for
inclusion in the 2011 Finance Bill will be published towards the end of 2010,
ahead of implementation of the Levy. The structure of the Levy is intended to
encourage the banks to move away from riskier funding models, reducing systemic
risk. Once fully in place, the Levy is expected to generate around £2.5 billion
per annum.
Copies of the consultation document and consultation stage impact assessment
have been deposited in the Vote Office and the libraries of both Houses.
Mark Hoban said:
"Excessive risk taking in the banking sector was a significant contributory
factor in the recent financial crisis. Alongside the wider financial regulatory
reform aimed at increasing the resilience of the financial sector, the Levy is
intended to ensure that the banking sector makes a fair contribution that
reflects the risks it poses to the financial system and the wider economy, and
to encourage banks to move away from riskier funding – problems with risky
funding led to serious liquidity problems that played a key role in the
financial crisis."
The Chancellor of the Exchequer, George Osborne, announced the introduction
of a Levy in the June Budget. It will apply to the balance sheets of UK banks
and building societies, and to the UK operations of banks from abroad. At the
same time, France and Germany also announced that they would introduce a Levy
based on banks’ balance sheets.
Notes
- The Chancellor of the Exchequer announced as part of the June Budget the
introduction of a Bank Levy from 01 January 2011. The Levy will be based on
banks’ balance sheets.
- The
consultation document published today is available on the HM Treasury
website.
- A
consultation stage impact assessment has been published alongside the
consultation document, and can be found on the HM Treasury website and the
HM Revenue & Customs website
(opens in new window).
About the Author
© Crown Copyright. Material taken from HM-Treasury.
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Article Published/Sorted/Amended on Scopulus 2010-07-13 23:28:17 in Business Articles
