IMF considers bank levy to help poor countries

by Gill Montia

Story link: IMF considers bank levy to help poor countries

The International Monetary Fund (IMF) is considering raising a levy from the world’s biggest banks and hedge funds to provide support for the poor countries of the world.

IMF managing director, Dominique Strauss-Kahn, believes it is only fair that the financial sector should pay to offset the shock waves it has caused in the global economy.

However, Mr Strauss-Kahn is reported to be opposed to a “Tobin” tax on banks’ foreign exchange trading.

This form of taxation was conceived by James Tobin in the 1970s.

The economist’s blue-print has recently been dusted-off by Financial Services Chairman Lord Turner and others, and considered as a means of limiting the City’s powers.

UK banks are already facing steep rises in regulatory charges as a result of the credit crisis and both the Government and financial sector are likely to be strongly opposed to an additional burden from the IMF.