New banking levies would be reasonable, says Barroso

3 June 2010

Head of the European Commission Juan Manuel Barroso has said he supports calls for a transaction tax or some other form of new levy on Europe's banks.

Speaking at a press conference to outline the commission's plans to shake up the financial services industry, Barroso touched on the prospect of a crisis fund levy to put money aside for future failures, Reuters reports.

His comments were made just weeks before the next meeting of G20 leaders in Canada, where banking reform is expected to be high on the agenda.

"Bearing in mind all the efforts made by our taxpayers to save the financial system, it seems to be only reasonable that there is a contribution from the financial sector," Barroso remarked.

The former Portuguese prime minister also spoke of the need for decisive action in overhauling financial regulations in Europe.

"If member states cannot reach agreement on these issues now, they never will," he said.

In the UK, chancellor George Osborne said last week that he supports a new banking levy in principle but is opposed to the idea of a rescue fund. Critics have claimed such a fund could encourage banks to take excessive risks.

By Gary Cooper

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