The Chancellor of the Exchequer announced as part of the Budget the introduction of a Bank Levy from 1 January 2011.
Excessive risk taking in the banking sector was a significant contributory factor in the recent financial crisis. Alongside the wider financial regulatory reform aimed at increasing the resilience of the financial sector, the levy is intended to ensure that the banking sector makes a fair contribution that reflects the risks it poses to the financial system and the wider economy, and to encourage banks to move away from riskier funding.
The Government have today published a consultation document setting out issues around technical aspects of the design and implementation of the Bank Levy. This consultation exercise will help to ensure the levy is designed in a way that best meets its objectives, including ensuring the compliance costs faced by firms are minimised.
It is proposed that draft legislation will be published in the autumn to allow for further comments from stakeholders. Final draft legislation for inclusion in the 2011 Finance Bill will be published towards the end of 2010, ahead of implementation of the levy.
Copies of the consultation document are available in the Vote Office and have been deposited in the Libraries of both Houses.