August 27, 2009

The chairman of Britain’s financial regulator proposed the idea of a global tax on banks that would be used to distribute profits to the world’s poor. Financial Services Authority Chairman Adair Turner told Prospect Magazine that a so-called Tobin Tax could be considered to deflate the “swollen financial sector.” “If increased capital requirements are insufficient, I am happy to consider taxes on financial transactions,” Turner told Prospect.

“Such taxes have long been the dream of development economists and those who care about climate change -- a nice sensible revenue source for funding global public goods.” It’s the first time Turner brought up the idea of a global tax on banking deals and his comments surprised the industry. The remarks come five months after his official report laying out banking industry changes in the wake of the financial crisis, and six weeks after a government paper detailing how his plans would be implemented.