WASHINGTON (MarketWatch) -- A proposed international tax on banks will take center stage at this weekend's meeting of finance ministers and central bank governors from the Group of 20 leading economies. The discussion is expected to touch on a preliminary report by the International Monetary Fund on how to structure a global bank tax, although a final agreement on the issue is unlikely. http://www.marketwatch.com/story/bank-tax-tops-g20-meeting-agenda-2010-04-20
Won't happen. For a global bank tax to work, everybody needs to be on board. Canada has already stated it will not take part in any type of global bank tax. I posted the link in a Canadian economy thread a week or so ago.
Good point. If you're a Canadian bank and you've avoided the mess due to a conservative approach, why would you be willing to help pay a tax, so that others can be bailed out?
Exactly. Instead, Canada is going to propose that banks require to keep emergency contingency capital on hand. I think this is a better option as it prevents banks from passing on the tax to consumers, which we all know will happen.
Flaherty has reiterated his defiance of a global bank tax today. He cites the fact that a global bank tax encourages reckless behaviour and risk taking due to the fact that banks know they will be bailed out if they mess up. Personally, I hope G20 countries (with the exception of Canada) adopt a bank tax. The banking business in Canada will explode with growth if this happens. Link to Flaherty's comments today: http://money.ca.msn.com/investing/news/business-news/article.aspx?cp-documentid=23966507