E Minister Gordon Brown yesterday claimed plans to impose some form of international levy on the banks to shore up the industry in future crises were gaining traction with policymakers around the globe.
“As a result of the advancement by US President Obama and financial secretary Tim Geithner about their levy on wholesale lending, I think the proposals that I made at St Andrews for an international levy... are now gaining currency around the world,” Brown said. “I think you will probably see further moves to get an international agreement about some international levy to deal with the responsibility that banks owe to society.”
The Prime Minister’s claims came after City minister Lord Myners met with officials from the G7 nations, the IMF, the FSA and the Bank of England to weigh up the options for overhauling the banking sector.
Myners said good progress had been made on the implementation of contingent capital requirements and proposals for banks to pay an “insurance premium” into an international rescue fund for the sector.
The summit came just a day after Myners told City A.M. the US administration’s plans to limit banks’ size and trading activities was “not [a step] we’d be minded to follow”.
Conservative London Mayor Boris Johnson also voiced anxiety over Obama’s plans, which have the official backing of the Tories, saying he “would need to be convinced” of the merits of the move.
Tory leader David Cameron yesterday also renewed his warning that the UK’s spiralling budget deficit remains the biggest challenge for the next government, even if official figures today show, as expected, that the UK exited recession last quarter.
“Labour’s debt crisis is now the biggest threat to our recovery so we will only get this recovery right if we start right now on a proper debt reduction plan,” he said.