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EU calls for tax on bank trades EU calls for tax on bank trades
(about 3 hours later)
European Union leaders have urged the International Monetary Fund (IMF) to consider implementing a global tax on financial transactions.European Union leaders have urged the International Monetary Fund (IMF) to consider implementing a global tax on financial transactions.
A so-called "Tobin Tax" has been pushed by France and the UK, but is less popular in the US.A so-called "Tobin Tax" has been pushed by France and the UK, but is less popular in the US.
The leaders called on the IMF to look at a range of options to ensure that banks do not take excessive risks that could lead to another financial crisis.The leaders called on the IMF to look at a range of options to ensure that banks do not take excessive risks that could lead to another financial crisis.
The call comes in a draft statement expected to be approved later.The call comes in a draft statement expected to be approved later.
"The European Council emphasises the importance of renewing the economic and social contract between financial institutions and the society they serve, and of ensuring that the public benefits in good times and is protected from risk," the draft statement said."The European Council emphasises the importance of renewing the economic and social contract between financial institutions and the society they serve, and of ensuring that the public benefits in good times and is protected from risk," the draft statement said.
Speaking at a conference in Brussels, UK Prime Minister Gordon Brown said: "We need a better relationship between the banks and the people they serve.
"There has been a growth in support in recent weeks for this idea and many, many countries are looking at it."
'Old idea''Old idea'
A Tobin Tax, named after the Nobel Prize winning economist James Tobin, was originally designed to raise funds for developing nations. A Tobin Tax, named after the Nobel Prize-winning economist James Tobin, was originally designed to raise funds for developing nations.
However, following the financial crisis, the tax is now seen by many as a possible way to help insure against future crises.However, following the financial crisis, the tax is now seen by many as a possible way to help insure against future crises.
But while the tax has been promoted by UK Prime Minister Gordon Brown and his French counterpart Nicolas Sarkozy, the US and the IMF have been less enthusiastic. But while the tax has been promoted by Mr Brown and his French counterpart Nicolas Sarkozy, the US and the IMF have been less enthusiastic.
At a meeting of G20 finance ministers last month, IMF head Dominique Strauss-Kahn described a tax on financial transactions as "a very old idea that is not really possible today".At a meeting of G20 finance ministers last month, IMF head Dominique Strauss-Kahn described a tax on financial transactions as "a very old idea that is not really possible today".
The EU's member states are clearly hoping to change his mind.The EU's member states are clearly hoping to change his mind.
Mr Brown and Mr Sarkozy also announced that Britain and France would contribute at least 1.7bn euros ($2.4bn; £1.5bn) each towards the 7.2bn euros EU leaders have pledged to help developing nations fight climate change over the next three years.
Earlier this week, the UK announced a 50% tax on bank bonuses above £25,000.Earlier this week, the UK announced a 50% tax on bank bonuses above £25,000.
France has said it is considering a similar tax on bonuses above 27,000 euros ($40,000; £24,000). Reports suggest the tax could be announced later. France has said it is considering a similar tax on bonuses above 27,000 euros. Reports suggest the tax could be announced later.
"We have been advocating this for a long time, and we are delighted to see that [the UK Prime Minister] is taking that stand," said French Finance Minister Christine Lagarde."We have been advocating this for a long time, and we are delighted to see that [the UK Prime Minister] is taking that stand," said French Finance Minister Christine Lagarde.