EU Mulls Bank Tax on High-Risk Transactions

The EU is considering a tax on high-risk transactions carried out by financial institutions, said parliament's economic affairs committee.

The tax would be put in place to 'discourage excessive risk-taking by financial institutions and to ensure the industry pays for the damage caused by the financial crisis," said the committee in a statement.

If a worldwide tax proves unachievable, the EU could consider going it alone, say MEPs.

In an oral question and resolution adopted today on a financial transaction tax, members of the committee also urge the Commission and Council to look at how the tax could be used to help developing countries fund the fight against climate change as well as to finance development cooperation. They should also consider how the tax could contribute to the EU budget, say MEPs.

The first step is an impact assessment of such a tax to see how far it could contribute to stabilising financial markets and prevent a similar crisis by targeting "undesirable" transactions.

Any such tax must not harm the banking system's ability to perform its vital role of financing real economy investments, stresses the Economic Affairs Committee.

These issues will be put to the Council and the Commission during the March plenary session in Strasbourg, said the committee.