The Lesson of a Levy on Banks
According to this briefing paper from Miles Saltiel, proposals to introduce a new ‘bank levy’ would do little to correct the problems in the banking sector, and act as a distraction from other, more pressing reforms. Politicians ought to reject populist calls for new taxes and punitive regulation and instead focus on a few key issues: breaking up the nationalized banks; ensuring greater transparency and more honest accounting; requiring tougher capital and liquidity ratios; mandating living wills so banks can be run down in an orderly fashion; and moving derivative contracts onto regulated exchanges.