UK Government has laid out the details of its proposed levy on Banks as they seek to raise 2.5 billion pounds a year to help stave off the costs of any future financial crises.
The Treasury has detailed its plan, which it plans to introduce in stages from 2011, and has asked for feedback by October 5. Along with France and Germany, Britain has been pushing for banks to pay for their part in the financial crisis and to implement measures to encourage them to move away from risky funding, which triggered the liquidity crunch.
The key points are:
Levy Rate - The government will first introduce a 0.04 percent levy on balance sheets in 2011, rising to 0.07 percent in 2012. There will also be reduced rate for longer-maturity funding initially set at 0.02 percent and rising to 0.035 percent.
Coverage - The levy will apply to three areas of banking and only to entities who have relevant liabilities of 20 billion pounds or more. These are 1) Global consolidated balance sheets of UK banking groups and building societies, 2) Aggregated subsidiary and branch balance sheets of foreign banks operating in the UK and 3) Balance sheets of UK banks in non-banking groups
To see the Treasury's consultation document, please click http://www.hm-treasury.gov.uk/d/consult_bank_levy_condoc.pdf
The Treasury has detailed its plan, which it plans to introduce in stages from 2011, and has asked for feedback by October 5. Along with France and Germany, Britain has been pushing for banks to pay for their part in the financial crisis and to implement measures to encourage them to move away from risky funding, which triggered the liquidity crunch.
The key points are:
Levy Rate - The government will first introduce a 0.04 percent levy on balance sheets in 2011, rising to 0.07 percent in 2012. There will also be reduced rate for longer-maturity funding initially set at 0.02 percent and rising to 0.035 percent.
Coverage - The levy will apply to three areas of banking and only to entities who have relevant liabilities of 20 billion pounds or more. These are 1) Global consolidated balance sheets of UK banking groups and building societies, 2) Aggregated subsidiary and branch balance sheets of foreign banks operating in the UK and 3) Balance sheets of UK banks in non-banking groups
To see the Treasury's consultation document, please click http://www.hm-treasury.gov.uk/d/consult_bank_levy_condoc.pdf
APA will be taking the opportunity to respond to the Consultation on behalf of the banking interests of Members and their businesses and would welcome comments and opinion.
Gareth, APA
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