Bank Taxes in the European Union

Levente Kovács
PhD, Secretary General of the Hungarian Banking Association

Published in: Public Finance Quarterly 2012/3 (p. 332-346.)

Summary: Bank taxes are a result of government measures aimed at managing the consequences of the global economic crisis. During the crisis, governments have recognised the serious impact of the crisis on the banking sector and the fiduciary risk ensuing from the special role banks play in the economy. A number of systemically important banks have been bailed out from public funds as a result. With the relative stabilisation of the financial system, measures aimed at recovering the public funds used for bailout and the creation of bank resolution funds with a view to managing potential future crises without using taxpayer money have come to the forefront. A politically popular method for this has been the imposition of various bank taxes. In the European Union, the imposition of a financial transaction tax has been discussed at several levels as a method enjoying general support. Without waiting for the bureaucratic processes of the EU, and without any impact studies in particular, 17 Member States have imposed bank taxes of some kind or another. The study primarily examines the potential impacts of introducing financial transaction taxes, cautioning decision-makers to exercise restraint in light of the expected economic consequences.

Keywords: bank tax, FTT, Tobin tax, financial transaction tax

Journal of Economic Literature (JEL) kód: H25, G10, G21, G38

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