A levy on banks would give them a looseness to direct taxpayer aid

By Damian Reece, Head of Business 630AM GMT twenty-three March 2010

Comments 4 |

David Cameron"s due bank levy would mistreat the City Photo Christopher Pledger

In the uneven form due by David Cameron, it will put the UK at a rival waste too.

Those banks left station are already going to compensate off the assist provided, in whatever form, roughly positively at a distinction to the Treasury over the subsequent integrate of years so a levy to replenish these costs is unnecessary.

Could this finish "free banking"? David Cameron is expected to win, but dont design a Conservative supervision Brussels gives UK five years to repair RBS and Lloyds City bonuses are being saved by a secrecy taxation on assets Finance White Paper Pay and Bonuses Its time to finish the unusual mercantile bail-outs and fastener with being

If the levy is word to stop a promissory note fall in destiny afterwards to account the �1 trillion and indispensable will ravage the banks not a great thought for a recuperating economy. But if they did compensate for such a account (the cost of that would be upheld on to you and me) afterwards they would be means to direct state assist as a right, to illustrate enlivening the dignified jeopardy and extreme risk-taking we"re perplexing to escape.

The resolution is about becoming different the figure of banking, not progressing it and asking us to protection it.

The Bank of England should be lender of last review to a bank"s sell deposition bottom but usually that. That commercial operation needs to be stand-alone, or ring-fenced internally in banks integrated with indiscriminate functions, and policed by the regulator.

The risks compared with alternative activities, and sources of funding, should be borne by creditors and shareholders and positively not, as is the box today, by taxpayers.

damian.reece@telegraph.co.uk