THE GUARDIAN: Gordon Brown claims credit for International Monetary Fund plan to impose tough levy on biggest banks' profits and pay
Tough proposals to cut the world's biggest banks down to size by taxing their profits and pay were outlined by the International Monetary Fund tonight in an attempt to spare taxpayers another massive public bailout of the financial sector.
In measures more stringent than Wall Street and the City had expected, the fund called for the introduction of a twin-track approach to the three-year banking crisis that would both force firms to pay for any future support packages and raise new taxes on their profits and remuneration.
The report, prepared by the Washington-based institution for the G20 group of developed and developing nations, was seized upon by Gordon Brown as evidence that his push for an international crackdown on the banking sector was gaining support.
Leaked in advance of the fund's meeting this weekend, the blueprint emerged as the investment bank Goldman Sachs released better than expected first quarter revenues and admitted its bonus and pay pool had reached $5.5bn (£3.3bn) in the first three months of 2010.
The anticipated study called for a financial stability contribution (FSC), which should be paid by all financial institutions, not just banks, and used to bail out weak and failing firms. It would initially be paid at a flat rate but eventually be tailored to suit institutions' size and riskiness.
While banks had been braced for the FSC plan, they were caught unawares by the proposal for a financial activities tax (FAT), which would be based on the profits and the pay structure of the firms. >>> Larry Elliott, Jill Treanor and Patrick Wintour | Tuesday, April 20, 2010
