Germany, France react to bank taxes
TEXT OF STORY
Bill Radke: German and French banks are reacting today to proposed bank taxes. There are similar ideas here in the U.S. -- the Obama Administration is looking to impose its own bank tax later this year. Christopher Werth has our story.
Christopher Werth: In Germany, government officials want a tax to raise $1.5 billion to help bailout banks in coming years. But under a German plan, only banks would pay a tax. Today, the French finance minister says in that country, hedge funds should be subject to a levy.
Richard Portes is with the London Business School. He says France can go after hedge funds all it wants -- it won't make a difference.
Richard Portes: Who cares whether the French tax hedge funds. No major hedge funds are based in France. The hedge funds are based in the U.K. and Switzerland and the United States, and this is just not a serious point.
In the U.S., the tax would target banks with over $50 billion in assets to ensure that taxpayer money is paid back for the Troubled Asset Relief Program, or the bailout known as TARP. But Portes says instead of bank levies, governments should cut big banks down to size, and place tighter controls on the kind of risky behaviour that lead to bailouts in the first place.
In London, I'm Christopher Werth for Marketplace.