World Business

G20 financial meeting unlikely to reach deal in bank levy

(Xinhua)
Updated: 2010-06-05 16:12

BUSAN, South Korea - The G20 financial leader meeting underway in South Korea's southeastern port city of Busan will unlikely to bring about a tangible result with regard to bank levy, officials here said Saturday.

Bank taxes, which have been recognized as the thorniest agenda item of the Busan meeting, will not be among the topics to be included in the joint communique to be announced later in the day due to strong oppositions from many countries, officials said under the condition of anonymity.

It is in line with the earlier remarks by US Treasury Secretary Timothy Geithner, who said before he left for the financial leader meeting that it is unlikely to see a tangible outcome on the issue in Busan.

"I don't think we're on the verge of a global consensus on bank levies yet," Geithner told a news conference.

Known as the Obama tax, a global bank levy has been strongly supported by some countries, such as the United States and Germany, approved of the need to burden banks with future rescues in a bid to brace for future financial crises.

Those who have not been hard struck by the recent financial turmoil, however, remained skeptical over the need to require their banks to pay for the cost.

As a chair country, South Korea supported the proposal, with South Korean Finance Minister Yoon Jeung-hyun sayig the adoption of the bank levy will discourage banks from moving around too much capital.

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"(Bank levy) will thus improve the healthiness of the foreign exchange market and also contribute to the general improvement of the current financial system," Yoon said in an e-mail interview with local media Korea Times.

Due to striking different views among the member countries, the bank levy discussions did not result in any agreement, although it may be continued in summits to be later held in Toronto and in Seoul.

The G20 financial leader meeting, held in Busan for two days, will close its two-day run Saturday with a joint communique.