The French Banking Federation (FBF) believes that the proposals for new bank taxes contained in the IMF's report would do nothing to ensure the stability of the international financial system as they would not enable crises to be prevented.
However, the IMF is correct in distinguishing between the settlement of budgetary costs of the recent crisis and the question of future crises. The IMF is recommending that settling past crises be treated based on different countries' situations, notably via a "backward tax", which corresponds to the budgetary cost committed. The IMF rightly noted major differences between countries. Let us remember that in France, the budget effect is positive in the amount of 2 billion euros. There is therefore no foundation for recouping public money.
Concerning crisis prevention measures, the IMF rightly highlighted that any measures taken must be at an international level and apply to all financial system players. However, in terms of the taxes that it is proposing, the IMF's approach is poorly adapted.
A genuine policy of prevention will not come from taxation but from joint measures at the international level in three areas:
- Firstly, the prudential measures which are currently being developed by the Basel Committee, i.e. capital levels that are tailored to the level of risk incurred;
- Secondly, the regulation of markets and activities thanks to stringent regulations and supervision;
- Thirdly, the quick and effective resolution of crises as soon as they occur at the institution or market level. This must occur in each country through the rapid intervention of the competent authorities, which must have effective legal and organisational resources available, in order to limit the impacts of any possible crisis. Shareholders and lenders must be able to get involved in appropriate crisis prevention and settlement initiatives.
The taxes proposed by the IMF do not enable these objectives to be achieved and cannot be a substitute for the necessary measures. Moreover, even their structure poses a problem:
- The first tax on financial activities would be charged on the banks' liabilities. As such, risks would mainly be situated on the assets side of the balance sheet. This is the approach used by the Basel Committee.
In terms of the banks' liabilities, which essentially means the way the banks finance themselves, supervisors have several methods of regulation if necessary, particularly by monitoring liquidity ratios. Taxing banks' liabilities is in no way a pledge to prevent risks.
- The second tax proposed by the IMF targets high earnings and pay, which are deemed to come from risky activities. Risk prevention in this case would be achieved by improved market organisation and strengthening of transparency, for which French banks have advocated.
In any case, any additional tax on banks would lead to their ability to lend, especially to SMEs and in particular in Europe, being curbed.
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