South Africa: IMF Got the Big Picture Right On Globaltax

opinion

Johannesburg — WHEN the next full-scale global financial crisis hits, let it not be said that the International Monetary Fund (IMF) never took a stab at forestalling it. Recently, the IMF proposed a new global tax on financial institutions loosely in proportion to their size, as well as a tax on banks' profits and bonuses.

The proposal has been greeted with predictable derision by the financial industry. More interesting and significant are the mixed reviews from Group of 20 (G-20) presidents and finance ministers. Governments at the epicentre of the recent financial crisis, especially the US and the UK, are downright enthusiastic, particularly about the tax on size. Countries that did not experience bank meltdowns, such as Canada, Australia, China, Brazil, and India, are unenthusiastic. Why should they change systems that proved so resilient?

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