Financial Crisis Responsibility Fee

Under bank levy is meant a levy introduced for financial institutions and credit institutions. By placing the costs of systemic risk in the lending and trading business to be imposed on the financial sector. In Germany, banks must due to the financial crisis from 2007 provide that levy since 2010. The legal basis is the restructuring fund law created by the Restructuring Act and the restructuring regulation.

Operation

Due to the restructuring fund for credit institutions at the Federal Agency for Financial Market Stabilisation ( FMSA ) the stabilization of the financial market should be ensured. The Fund is financed by contributions from the banks, the bank levy.

Contributions are basically all credit institutions within the meaning of § 1 paragraph 1 of the German Banking Act (§ 2 RStruktFG ).

The contributory credit institutions are obliged to pay as of September 30 of a calendar year annual fees for the first time on 30 September 2011. The amount depends on the volume of business, size, and cross-linking of the contributory institution in the financial market. The FMSA can collect special contributions to the extent that the Fund's resources are insufficient ( cf. § 12 RStruktFG ).

Details to the contribution assessment and collection are regulated in the Restructuring Fund Ordinance ( RStruktFV ) of 20 July 2011.

The tax is justified on the one with the polluter pays principle ( the financial service providers as actors in the financial markets causes of the systemic risk ), on the other hand with the burden of the (main ) beneficiaries. Also, a credit institution as the German bank that needs no support itself, benefits from the fact that it needs to sustain costs of the insolvency of other market participants. The first argument corresponds to the principle of strict liability.

Characteristics

Mostly it is discussed, possibly to use as a basis for assessment of tax, the total assets of the institution, less capital and specific items. However, this approach does not take into account the level of risk that the company received and the amount of equity as a risk buffer and thus the probability to become self- renovation.

It is also conceivable individual groups of financial services companies should be treated differently because the systemic risk arising from the respective sub-markets at varying levels. In particular, it is discussed to charge larger businesses stronger. For the reasons see: Too Big to Fail.

Effect

The primary and desired effect is an additional tax revenue collected in the state, which is fed depending on the concept in the Stability / rescue fund or the state is at leisure.

Similar to corporate taxes reduces a bank levy and the gain and can be partially passed on higher fees and less favorable interest rates to customers. The extent of pass-through to customers depends on the intensity of competition in the marketplace.

A reduction of the gain on the other hand reduces the risk-bearing capacity of the company, thus increasing systemic risk. In particular, the rescued during the financial crisis, banks are faced with the problem that the redevelopment is complicated by the bank levy.

A pass-through to customers in the form of higher costs and lending rates reduces the mass purchasing power and acts as a rate hike dampening effect on the economy.

Discussion and stand in other countries

USA

In January 2010, U.S. President Barack Obama proposed a Financial Crisis Responsibility Fee, German: financial crisis responsibility levy before. This tax should only be paid by banks and insurance companies with total assets of more than 50 billion U.S. dollars. Tax base shall be the assets of the financial company minus the equity as well as the funds for the Bank Deposit Guarantee or technical provisions. The tax rate of 0.15 percent will apply for ten years and generate tax revenue amounting to about nine billion dollars annually. End of June 2010 attracted the Democrats back the bill on the introduction of this tax, after it became clear that he would not receive a majority in parliament.

Austria

In Austria joined on 1 January 2011, the Stability Tax Act ( StabAbgG ) came into force, which banks on a bank levy ( colloquially referred to as a bank tax ) committed. As a basis for calculating the tax liability, the unconsolidated balance sheet total and the volumes of speculative derivative transactions in the trading book of banks used. Institutions with total assets of less than 1 billion are not taxed. Between 1 billion and 20 billion the tax is 0.055 %, about 20 billion 0.085 %. Speculative derivatives are taxed regardless of the total assets of 0.013 %. The government expects, due to this levy annual revenue of 500 million euros. Is criticized, among other things, that the tax depends on the size of the bank, as well as any less favorable treatment of Austrian banks in international competition.

European Union

The European Commission in Brussels is planning an EU-wide bank levy since May 2010. This is part of the regulations for the European Union Bank.