U.S. banks paying bulk of U.K. banker bonus tax
A general view of the skyscrapers of Canary Wharf in London
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Steve Chiotakis: President Obama signs the financial reform bill into law today. The bill hopes to curb risky bank behavior here in the U.S. but doesn't include any taxes on banker pay. At the same time, a tax introduced in the U.K. last year to curb the size of bankers' bonuses is creating a windfall for the British government. And it turns out, American banks are paying the bulk of it. Christopher Werth reports from London.
Christopher Werth: U.S. banks with operations in the U.K. have already forked out about $2 billion in taxes aimed at limiting excessive pay. That's more than half the government has raised so far, and is weighing on banks' earnings. Goldman Sachs just announced it's paying $600 million to the British government
Justin Urquart Stewart is with Seven Investment Management:
Justin Urquart Stewart: The U.S. banks are actually the ones who are involved most in the investment banking side. There are relatively few in comparison of the British banks. So what you are seeing was the Americans looking as though being significantly disadvantaged. But it wasn't by way of nation, it was by way of nature of their business.
The tax is meant to be a one-time event. But Urquart Stewart says with tougher regulations being introduced in the U.S. with the reform of Wall Street, he expects the British government to consider making some form of the tax permanent. And for a British government starved of cash, the extra cash doesn't hurt.
In London, I'm Christopher Werth for Marketplace.