Top Firm Said To Share UK Bonus Tax Pain Around The World

The Financial Times reports that Deutsche Bank has confirmed that it will 'spread the pain' of the UK's bank bonus tax around the world, to ensure that UK bankers are not disadvantaged.

Deutsche CEO Josef Ackermann told the newspaper: 'We will clearly globalise it. If parts (of the cost of the tax) are paid out of the bonus pool, we would seek to globalise it. It would be unfair to treat the UK bankers differently'. The upshot could be that New York will end up receiving few tax revenue dollars, as Deutsche bankers there are paid less to help account for the UK bank bonus tax.

In the meantime, The Guardian reports that some of the UK's most senior bankers are believed to be trying to convince the Treasury to do away with its controversial bank bonus tax and rely on 'voluntary' contributions instead. The unnamed bankers apparently believe that the revenues from a 'voluntary' scheme could top $3.2bn - far higher than the $886m the UK government estimates it will generate from the tax. One banker told Here Is The City: 'Sounds like the kind of idea that Bernie Madoff would have come up with. I don't think that the UK government, however, is quite as gullible as some of Bernie's investors'.

And The Times reports that the Bank of England has said that the financial crisis could have been avoided in the UK if banks has used just 20% of the funds they paid out in bonuses and dividends between 2000 and 2008 to strengthen their balance sheets.

Bank of England official Andrew Haldane has also told the BBC that the departure of some financial institutions from the UK (as a result of the bonus tax) could be a 'price worth paying....given the costs of carrying (the) financial system around'.

The Financial Times is also reporting that new banking regulations coming from The Basel Committee on Banking Supervision will mean that banks will be prohibited from paying bonuses and dividends should their capital levels fall below certain minimum thresholds.

Finally, The Times reports that a group of UK-based institutional investors are after a competition inquiry into the fees charged by investment banks. The newspaper quotes one investor, who said: 'It is egregious......(Companies are having to) pay ludicrous investment banking fees, which are leading to supernormal profits at the banks, and then leaving the door as excessive bonuses'.

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