April, 17, 2010

European Union finance ministers were working Saturday on ways to ensure tougher banking supervision, and considering a bank levy to pay for banks that collapse in the future, hoping to prevent a repeat of the recent financial crisis which cost governments billions of euros.French Finance Minister Christine Lagarde told reporters late Friday that she wanted all major financial groups to pay a fee "on the basis of the riskiest activities that they conduct."

"The riskier the activity, the more tax there would be," she said. "You could call it a tax on risk."Any levy on banks to pay into a fund to rescue lenders in future crises would be set up individually by the EU's 27 nations as there is no widespread support for a bigger European fund.Portugal's central banker Vitor Manuel Ribeiro Constancio — who will soon take up a post as the European Central Bank's vice-president — said any levy should be limited to paying for bank collapses and should not be used for other projects.

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