Bank tax proposed by EU commissioner to avoid future taxpayer bailouts

Bank tax proposed by EU commissioner to avoid future taxpayer bailouts It has been reported that the European Union commissioner for internal markets proposed an international effort to tax banks to avoid future taxpayer bailouts.

The New York Times reported on Wednesday that Commissioner Michel Barnier said it was "not acceptable that taxpayers should continue to bear the heavy cost of rescuing the banking sector."

He proposed banks "contribute to a fund designed to manage bank failure, protect financial stability and the banking sector."

The proposal was more sound than having countries setting up individual bank-funded reserves, as the levies and the rules would vary from country to country, Bernd Brabander, representing a German banking group that includes Deutsche Bank, and Commerzbank, said.

He said, "If we had a patchwork, that would not help much."

It was also reported that the proposal will be reviewed at the next EU summit. Should it prove to be acceptable there, the EU would take the idea to the next meeting of the Group of 20 Nations in Toronto, Canada, in late June.

The concept of taxing banks has merit, but the funds should be managed by separate nationalities, not by an international group, British business Secretary Vince Cable has already said.

The newspaper further said that the Netherlands is also likely to oppose the idea. (With Inputs from Agencies)