Brown urges debate on banking reform

November 9, 2009
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, LONDON, Nov 9 – British Prime Minister Gordon Brown on Monday urged banks to debate reform including a possible tax on global financial transactions, in the wake of the G20 finance ministers\’ meet.

Brown on Saturday surprised finance ministers meeting in the Scottish town of St Andrews, by urging them to consider a global levy, but the idea got a lukewarm response.

Brown said such a levy, often called the Tobin Tax after the US economist who devised it, would force financial institutions to be more responsible and was one of a range of measures that could help curb risky behaviour.

Writing in the Financial Times on Monday, Brown said a new "social contract" was needed with banks to make them more responsible to society following the global financial crisis.

A levy was one of four options Brown said should be considered.

"A new contract requires a wide public debate, one in which banks themselves should be leading participants," he said.

"It will not always be a comfortable discussion, but it is in my view an essential one."

The United States appeared to shoot the proposal down in flames at the G20 meet which wrapped up on Saturday, with Treasury Secretary Tim Geithner saying his country had not changed its long-held opposition to an idea first floated in the 1970s.

British Chancellor Alistair Darling said on Sunday the tax was still worth studying despite the opposition. "It\’s a question of fairness," he told the BBC.

"I think there is broad agreement we should look at these things.

"They are not easy, they are not without their difficulties.

"But if you don\’t look at them, you won\’t know," he said.

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