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The mother of all bank levies
Read more about: Economy, Taxation 
In today’s UK emergency budget, George Osborne announced a new levy on bank liabilities (excluding retail deposits and capital) of 0.04 percent rising to 0.07 percent after a year. It will raise about £2.5 billion when fully operational. Today during Leaders Questions when Enda Kenny put Brian Cowen on the spot about the shock new revelation (of something that has been known for months) that the 22 billion to Anglo is, like Christy Mahon, lost surely, Cowen’s answer included –
There is a funding requirement, as things stand, of €22 billion. The options that were available for an immediate liquidation were far in excess of that. In the longer term, in the aftermath of this recapitalisation, we will have to consider the question of obtaining some bank levy support for return of moneys to the taxpayer and the Exchequer.
Question: did he mean to propose, as it sounds like, a €22 billion levy on surviving Irish banks to cover the cost of the Anglo bailout? The UK levy gives an idea of the scale of what would be involved to make any serious inroads in the 22 billion. More likely is that Ireland is lining up an an Osborne-size levy, but the spinners have decided to package it as payback time for the Anglo money.
22billion is not a lot of money if you say it slow or dripfeed it a billion or two at the time, but maybe 22 billion will eventually end up being 44 billion if governmeny costings are anything to go by.
Where is all going to end – obviously in total disaster when the ability to borrow dries up.
P,
Dear God help us! What a bunch! As you point out it’s not as if anyone with half a brain didn’t know the money was gone a long time ago. It’s called a property crash and is what happens when banks lend out too much money on speculative bubble transactions whose value falls through the floor when the bubble bursts. O.K., so it took a while to find out just how much was gone, but the figures have been put on it for quite a while now, as has the cost of alternatives like shutting the place down or ‘orderly’ wind downs or whatever; all hotly debated over several months past.
But what do we get? So-called ‘leaders’ whose only capacity is to go into the Dail and parrot a newspaper headline in tones of mock outrage and faux hysteria, confronting another ‘leader’ who couldn’t explain fresh meat to a cat.
If, and it’s a big ‘if’, Anglo get the EU’s go ahead for their good bank/bad bank model, there’s a chance that in time some of the losses may be retrieved to the benefit of the taxpayer. But even the most optimistic of Anglo analysts admits it’s more likely to amount to no more than small change that can only make a very small dent in the final reckoning for Anglo’s profligacy and the moments of madness in which our other most revered banking institutions, AIB and BoI, indulged.
After that, it’s down to a bank levy to try and claw some more of it back from the sector.The only thing that will anaesthetise the pain of the losses over the longer term is a return to what Bertie Ahern used to call ‘groat’. Now if our current crop of leaders had a viable idea between the lot of them as to how to generate some ‘groat’ in the economy, I’d have some respect for them. If they have, I certainly haven’t heard it, not yet anyway.
Just another tax on the consumer!
Demonizing banks is a blind. Those who actually made and make money out of the bubble are to blame!
That includes all politicians and bagmen who take pay offs from those who augmented the obvious bubble!