Christine Lagarde, Minister of economy and finance, reveals the "voices" the amount of the new tax will be applied to banks from next year. It complements the other contributions of the banks put in place in the strengthening of the surveillance of establishments and the protection of consumers.
After the Germany, it is the turn of the France to establish a bank tax to prevent the risk of a possible bankruptcy. What are its contours
Banks will be put to work in the amount of EUR 1 billion. First, there is the Bank tax, which will apply as from next year about 20 banks, credit institutions and investment firms. Her move from the State budget, $ 504 million euros next year, 555 million in 2012 and 810 million as early as 2013. Sitting on risky assets, it boost to increase own funds provided by the Basel Committee requirements. It will hit the French banks, in respect of their international activity, but also foreign banks, in respect of their French activity. The principle is clear: a bank will take risks, more it will be taxed. Agreements are under negotiation to avoid double taxation of companies which would be hit in Paris and London, in respect of the same assets.
This is good news for the State budget since he will recover the proceeds of the tax...
No mistake on the goal: this is not a measure of performance, but a project to encourage financial institutions to control risk taking them. This is not a punitive measure.
Will tax be deductible from corporate income tax
As all loads, it will be actually deductible.
The amount of the tax may seem small on the range in spring (between 300 and EUR 1 billion)...
It must have a global vision: in addition to the Bank tax, I have decided to increase the participation of financial institutions to deposit guarantee fund, $ additional in 2011, 2012, and 2013 EUR 90 million, or 270 million in all. An order will be published in the sense in the coming days. Objective: to fund the recovery of 70,000 to 100,000 euros the amount guaranteed for each depositor beginning January 2011. On this occasion, I have decided to reduce two months to twenty days the time between the request of an applicant points and the payment of actual money by the guarantee fund. Moreover, the contribution to control costs, which forced banks to pay for their own supervision, will represent an additional levy of 125 million. In 2013, it is therefore more than 1 billion euros of additional revenue that will be taken from the banks. It is not nothing! But the goal is not to choke the banks.
How justified the fact that the French tax reported less than German
The German Government expects a product of the order of EUR 1.5 billion to the year 2013. We are building on 1 billion taking into account the three taxes mentioned above. However the German banking industry weighs 1.5 times more than our own. The effort is therefore proportionately the same. I would add that the Germany spent the equivalent of 5 of its GDP in its bailout of the banks during the crisis, compared with 1.1 of GDP for the France. And that German banks have, at this stage, paid only a small portion, while their French counterparts were repaid in three quarters.
The performance of the British tax would be 2 billion pounds...
Weight of the financial sector, we are there, largely online.
Banking tax strike "hedge funds"
Not, and indeed neither the English nor the Germans do submit them to tax. "Hedge funds" regulation is a thorny in itself since the AIFM directive "alternative investment fund managers", Editor's note, which was part to be adopted in the spring on the Spanish proposal, is currently blocked. The British argued that offshore funds are the European passport, what we were competing with a large majority of European countries. Now, the text proposed by the Belgian accepts the European passport for offshore funds. The situation is so delicate, but we still hope to assert our views for an adoption of the directive - absolutely necessary also - before the end of the year.
Nicolas Sarkozy is a tax on financial transactions to finance development. How is it supposed to be articulated with the new levies that you just mentioned
It is an entirely different issue. With the Germany, we advocate for innovative financing to support development and ecology. The British and the Americans are more reluctant. I hope to move forward at the G20 in Seoul.
Among banking issues still pending is the issue of systemic institutions. Are you willing to own funds for systemic recognized banks overload
Consider all the options on this dossier. But, in principle, it seems to me that add a new layer of some institutions own funds is not the absolute panacea. Another option is to put in place mechanisms to resolve the crises to manage the difficulties of a large institution without jeopardizing the entire banking system. It is a path that is not yet cleared and which I asked Jean-FranÁois Lepetit a report in the context of the g-20 in Seoul. A third track, finally, is to strengthen in a manner very rigorous, or even inquisitorial powers of regulators in the supervision of institutions considered to be systemic. I gladly instead for these last two options.
In bonus, what are the lessons of the report that you have ordered from Michel Camdessus last year
The report as such is not completed, because Michel Camdessus still wishes to assess the impact of the measures already taken on the potential mobility of traders teams in banks. But it has already developed a series of recommendations read note below that will be useful in the future g-20 and the work of the Council of financial stability. This has already led me to take two steps. First, I will incorporate a new amendment to the banking and financial regulation Bill to pass second reading in the Senate next week: to prolong the action of Michel Camdessus, I will entrust to the supervisory authority the mission to monitor the correct application of the rules relating to remuneration in the banks. In addition, I asked the financial stability Board to submit us a report each year in the first half by update on the practices in different countries and facilitating the comparison. One last April concluded to a more strict application of the rules on bonuses in the countries of continental Europe and in the Anglo-Saxon countries. It will be interesting to see how things evolve.
In view of the timing of Basel III, do you always at the risk of slowing of the financing of the economy by banks
With a ratio of own funds of 7 by 2019, the banks should not use this argument against prudential reform.
Do you always worry that Americans do not apply Basel III
With all the pressure that we practise, I doubt that they have the choice.