IMF considers two global bank taxes

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Steve Chiotakis: As Congress continues debate on financial regulations in this country, the idea of an American bank tax could fuel a political fight. But an International Monetary Fund plan for a couple of global taxes is also in the cards. From London, Marketplace’s Stephen Beard reports.

Stephen Beard: The banks are not going to like this. The IMF plan is for two worldwide taxes, to curb the banks’ risky behaviour and to fund any future bailouts.

The first tax would take a slice of profits and pay. Banks that dole out big bonuses would be hardest hit. The other tax would raise a reserve so governments are ready for the next crash.

But economist Avi Persaud is not convinced this is the way to go:

Avi Persaud: The best defense for taxpayers is not these taxes, but proper financial regulation that stops crashes happening in the first place.

Nevertheless, he says, when the G20 finance ministers study the plan at their meeting in Washington this week, they’ll probably go for it.

In London, this is Stephen Beard for Marketplace.