It has been reported that in Prospect magazine Lord Turner, Chairman of the FSA, has said that he would be happy to consider a tax on banks to prevent excessive bonus payments.
The British Bankers' Association (BBA) has issued the following statement in response Lord Turner’s comments:
"The UK’s financial services industry is a major provider of jobs and source of tax revenues. We are the top centre in the world for global banking and that’s why more than half the 336 banks operating in the UK have been attracted here from other countries. That’s an achievement that we shouldn’t take lightly. If we introduce the wrong kind of regulation or the wrong kind of taxes we could so easily lose that position by driving business abroad. That would mean the UK would receive less revenue through taxes and there would be job losses, not just in the banking industry, but also in all those other businesses, large and small, that provide services to banks. On so many occasions in the past the country has lost chunks of industry through making the wrong decisions. Let’s not do that again."
The Investment Management Association (IMA) has also published a short response to Lord Turner’s comments. The IMA’s chief executive, Richard Saunders, states:
"Lord Turner has rightly identified the need for banks to manage risk better and to keep higher levels of capital when they engage in riskier activities. We welcome the debate. However, transaction taxes carry the risk that, like Stamp Duty, it’s the ordinary saver who ends up paying. As the debate goes forward, this needs to be kept in mind."
View BBA response to Lord Turner's comments in Prospect Magazine today, 27 August 2009
View IMA comments on Lord Turner’s threat to tax city trading, 27 August 2009