A levy on banks - or in EU speak, a "resolution fund" - has been in the pipeline for a few months and has proven a popular idea with the French, German and British governments.
The EU's internal market commissioner, Michel Barnier, is expected to unveil proposals tomorrow (26 May) to establish a European super-fund of national resolution funds, an idea that enjoys the full backing of the German government, which has adopted the toughest stance on financial reform lately.
France and Britain, on the other hand, argue that the revenues should go into national coffers.
Barnier said in an earlier proposal (EurActiv 22/03/10) that he would prefer to see a tax on banks' balance sheets, and not on transactions via a so-called 'Tobin Tax', which has curried much favour in the German and Austrian national parliaments.
Barnier will probably leave it up to countries themselves to decide whether the tax should be imposed on assets, liabilities or profits, according to Commission sources.
The EU's resolution fund has also received backing from the head of the International Monetary Fund, Dominique Strauss Kahn.
"Instead of disputing the role of this or that national authority in the event of the collapse of a cross-border financial institution, the problem should be solved at its roots," Strauss-Kahn told Brussels policymakers last month.
''The banking system should be pre-funded by the industry itself, through a mix of tariffs on deposit guarantees and taxes on the relevant financial institutions,'' the IMF director added.
However, some EU observers who lament the passing of a watered-down financial reform bill in the US fear that the EU may be alone in taking a tougher course to reform the financial sector.
A Wall Street source said that the Dodd Bill, which expands US government oversight of the increasingly complex banking system and financial markets, will do little to change the status quo.
"It'll crimp the profit pool initially by 15 or 20% and increase oversight and compliance costs, but there's no break-up of any institution or onerous new taxes," the anonymous US source is quoted as saying in the American press.
Critics of the bill worry that it will not disincentivise the kind of risk-taking that caused the financial crisis in the first place.
Of all the financial reforms on the table, a tax on banks' gains has been one of the most feared within the sector, as bankers worry it would curb their lending capacity by reducing the capital on their books.
In addition, EU finance ministers announced last week that they would seek to raise the fees of state guarantees for the sector (EurActiv 17/05/10).
The European Banking Federation, an umbrella group of the EU's banks, said that the tax would overlap with other regulatory changes coming out of Brussels and do little to improve the stability of the financial system.
