The head of the European Union's executive arm has pledged to ask world leaders to impose a special tax on banks to cover their wind-up costs in an emergency.
Speaking after a meeting of EU leaders at which they agreed a rescue scheme for struggling Greece, European Commission President Jose Manuel Barroso said he wanted to charge banks a levy for a fund that could be tapped if a lender faced collapse.
Barroso, whose Commission proposes new laws for the 27-country EU, said he would put the idea to the Group of 20 developed and emerging economies when their leaders meet in June.
"I have proposed that we should push the G20 forward on addressing the burden of bank repair including through levies on banks to feed resolution funds," the former Portuguese prime minister told reporters.
Imposing such a tax would lighten the burden on governments in any further financial crises after many were forced to spend billions to prop up heavily indebted lenders that struggled to borrow in the downturn.
Barroso indicated that he may put forward a European law for a fund to cover bank wind-ups. "These are both areas where the EU is well placed to put fresh ideas on the table," he said.
Berlin and London have indicated support for such a levy. They want it to reflect the risk a bank poses to the financial system.
Washington is also keen on such a tax but would like to use the money to pay for the current clean-up rather than holding onto it for future economic slumps.
The head of the International Monetary Fund, Dominique Strauss-Kahn, is expected to propose a similar levy when he meets G20 finance ministers in Washington next month.
Barroso is pursuing an idea originally floated in Europe by Sweden this year.
Sweden has embarked on a mission to recoup roughly 75 billion Swedish crowns ($10.4 billion) from its banks that will then be set aside in a fund to cope with financial crises.
It opted for a direct levy on bank loans rather than a tax on transactions -- such as buying investments -- because a similar move after the country's 1990s banking crisis backfired.
On Friday, European leaders called for faster regulation of bankers, their pay and the way they do business at a meeting that agreed how the EU will help Greece, sucked into a global crisis many blame on financiers.
The economic slump, triggered when banks lost control of loans they had repackaged and sold, has put regulation of financial services at the top of the political agenda.
The European Union is pushing through a raft of rules, from curbing banker pay to demanding that lenders set aside more money for difficult times.
Leaders including German Chancellor Angela Merkel and French President Nicolas Sarkozy called in a statement for "rapid progress" on rules for the amount of capital banks are required to keep, coping with lenders deemed "too big to fail" and increasing transparency on derivatives markets.
They signalled a desire for cooperation between Brussels and Washington in tackling financial services regulation.
Earlier this month, a row flared between Europe and the United States over how Brussels wants to regulate hedge funds and private equity. A last-minute intervention by British Prime Minister Gordon Brown put the planned EU law on hold.
The delay disappointed many lawmakers, who believe it throws a question mark not only over the EU's ability to control hedge funds but also to shake up financial services.
ReutersGüncelleme Tarihi: 27 Mart 2010, 00:10