G20 financial leaders meeting draws joint communique on financial reform (4)

16:19, June 06, 2010      

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Bank taxes, which have been recognized as the thorniest agenda item of the Busan meeting, were not included in detail in the joint communique seemingly as leaders could not narrow differences due to strong oppositions from many countries.

According to James Flaherty of Canada, the majority of countries were opposed to a unified form of bank regulation at the global level, while they agreed on the need for regulating financial institutions who have been accused of the main culprit of the recent global financial turmoil.

It is in line with the earlier remarks by U.S. Treasury Secretary Timothy Geithner, who said before he left for the financial leader meeting that it is unlikely to see a tangible outcome on the issue in Busan.

"I don't think we're on the verge of a global consensus on bank levies yet," Geithner told a news conference.

Known as the Obama tax, a global bank levy has been strongly supported by some countries, such as the United States and Germany, approved of the need to burden banks with future rescues in a bid to brace for future financial crises.

Those who have not been hard struck by the recent financial turmoil, however, remained skeptical over the need to require their banks to pay for the cost.

As a chair country, South Korea supported the proposal, with South Korean Finance Minister Yoon Jeung-hyun saying the adoption of the bank levy will discourage banks from moving around too much capital.

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