By Claire West
Financial Secretary to the Treasury, Mark Hoban MP, announced today the publication by the Government of draft legislation on the Bank Levy, which was announced in the June Budget.
Following consultation with industry over the summer, the draft legislation and accompanying consultation response sets out the details of how the levy will work ahead of final legislation, which will be published before the end of the year.
The Government has carefully considered the responses from all interested parties during the consultation to help ensure the successful introduction of the Bank Levy, which is intended to encourage banks to move to less risky funding profiles. The levy is expected to generate around £2.5 billion of annual revenues by 2012-13. The levy will be permanent.
Mark Hoban said:
“We have consulted on the design of the scheme so that it achieves two objectives: firstly, ensuring that banks make a fair contribution in respect of the potential risks they pose to the UK financial system and wider economy. Secondly, the final scheme design incentivises banks to make greater use of more stable financial sources, such as long term debt and equity, working with the grain of our wider reform programme.”