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Chambers of G-20 nations oppose bank transaction tax

BS Reporter  |  New Delhi 

An overwhelming majority of the chambers of the G-20 countries, except Eurochambres, has opposed the idea of a bank tax in a memorandum to the G-20 political leadership.

Members of Eurochambres, the association of European chambers of commerce and industry, had differences in their views on the issue and, therefore, it refused to express its unequivocal support for the chambers’ rejection of the idea of a bank tax.

Ficci, which joined the group on behalf of India Inc, pointed out and categorically expressed its views arguing against the imposition of a bank tax. Ficci is a member of the Chambers of Commerce of the G-20 countries.

The chambers have, however, underlined the importance of reasonable regulation of the financial sector and cautioned against over-regulation.

Incidentally, a meeting of the business representatives of the G-20 countries is also being held at Toronto, coinciding with G-20 deliberations. The business community is giving its feedback on issues affecting their economy, the global economy and steps proposed to be discussed at the summit.

The member chambers emphasised on delivering the framework for a strong, sustainable economic growth, while consolidating public finances and repairing the financial sector. They pointed out that the governments must ensure sustained economic growth while keeping public debt in check.

The chambers say public budgets need to be rebalanced with clear plans for exiting from unsustainably high levels of public debt and more efficient spending to enhance long-term growth. They added there was a need to reform the financial sector. Priority should be given to ensuring adequate financial sector capital and liquidity requirements, developing an efficient early-warning system and global initiatives to promote standardisation, transparency and central clearing for derivatives markets. Any potentially forthcoming rules on banks’ capital provisions should take into account the need to ensure businesses have appropriate access to financing in economic downturns.

The chambers urgerd G-20 to conclude the Doha Round of world trade talks and dismantle trade barriers.

They said governments must refrain themselves from raising barriers or imposing new barriers to both outward and inbound investment. Government criteria for blocking foreign investment in the defence of ‘national security’ or of a ‘strategic industry’ should be narrowly defined and only applied under exceptional circumstances.

The memorandum notes inappropriate and insufficient protection of IP can distort free trade, impede investment, impair technology transfer and hinder innovation. Therefore, attention must be given to concrete enforcement of the Trade Related Aspects of Intellectual Property Rights agreement.

First Published: Sat, June 26 2010. 01:06 IST