During the G20 finance ministers meeting in St. Andrews, the British Prime Minister addressed the G20 countries to implement a worldwide tax on financial transactions. Gordon Brown's argued for the imposition of a multi-billion pound tax on international transactions is to get "a better economic and social contract to reflect the global responsibilities of financial institutions to society''. In short to make banks socially responsible, and urge them not to take unnecessary risks.
Wouldn’t it be better if risk calculations in banks were based on the risk of going bankrupt instead of those imposed by government intervention and regulation? Unfortunately, Gordon Brown himself has played an active role in removing this part of the risk calculation by using taxpayer money to bail out the banks.
Gordon Brown has said that the UK would not act on its own and implement the Tobin tax without a global agreement. This is no brainer for most of them. US Treasury Secretary Timothy Geithner has turned down the Prime Minister's irresistible offer. No surprises there.
