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German cabinet approves draft bill on bank tax

26 August 2010 12:42 (UTC +04:00)

Baku - APA-Economics. Germany’s cabinet approved a bank restructuring bill Wednesday, planning to place a new tax on banks and to use this money, rather than taxpayers’, for rescuing troubled Banks in future financial crisis, People’s Daily Online reported.

The draft bill required German banks to contribute to a bailout fund every year, which would be used to pay for the costs of possible financial storms. It is expected that the government would raise some 1 billion euros (1.27 billion dollars) annually from the new tax policy.

The levy will be paid by all Germany- headquartered banks, including savings and cooperative ones. Contributions of banks will be based on their level of risk -- those engaging in higher- risk activities should pay more than those with less risky transactions.

The bill also hopes to give more power to Germany’s financial regulators, such as transferring troubled banks’ property to another private bank or a state-run institution during financial crisis.