October 24, 2009

France moved toward tightening the leash on financial institutions Friday after the lower house of Parliament approved the creation of two taxes—one on bank capital and another on bank profits.Both taxes have to be approved by the upper house before they come into force.France's tax plan comes as several European countries are seeking ways to recoup some of the funds used to bail out banks in the past year.

The first tax, proposed by the French government, is a 0.04% to 0.08% levy on bank capital designed to finance banking supervision. The second tax, which was proposed by an opposition Socialist lawmaker, is a 10% profit tax that would apply only once, in 2010.The government has said it was opposed to the profit tax, but the measure was approved Friday after garnering unexpected support from members of the ruling UMP party of President Nicolas Sarkozy.