Debate on Hungarian ’Bank Tax’, Pros and Cons

"The special tax to be levied on domestic financial institutions, at the extent planned by the government, can reduce the domestic banking system's ability to attract capital and lend.

"The special tax to be levied on domestic financial institutions, at the extent planned by the government, can reduce the domestic banking system's ability to attract capital and lend, which can cause a growth loss in the short and longer term," claims the Hungarian Central Bank. The government, just like the one of Germany, France and the UK intends to gather HUF 187 billion in 2010 from financial institutions as their contribution to the remidiationremediation of the economy after the crisis.
European governments do not agree in the modalities as the German government would like to isolate an independent fund monetized by the banking taxes while the French administration would raise capital for the central budget. The Hungarian tax would reach the 0.7 pct of the GDP, a proportion 6-–7 times bigger than the UK version. However, the government intends to purify the portfolios of the lenders and use the sum for rebalancing the tipped over credit balance of many heavily indebted citizens.

 

News Monitoring