Business

Bank levy bill approved by German government

Road sign saying "stop here on red light" outside Deutsche Bank's headquarters in Frankfurt
Image caption The government hopes banks will start paying the bank levy next year

Germany's government has approved a draft law imposing a levy on banks to cover the costs of any future financial crisis.

The government hopes the bill will gain parliamentary approval before being passed into law in the new year.

The levy should raise about 1bn euros ($1.3bn; £800m) a year.

The UK and France have already committed to introducing bank levies, but so far, there has been no agreement on a global tax.

Global co-operation

The leaders of Europe's three biggest economies argue that taxpayers should not be expected to foot the bill for any future financial crises.

This follows the multi-billion dollar bail-outs made by governments across the world to help support the banking sector that appeared close to collapse in 2008.

The UK government announced in June it would be introducing a bank levy designed to raise £8bn over the next four years.

In the US, President Barack Obama wants to introduce a bank levy, but the proposal is bogged down in Congress.

Critics of introducing a levy on banks have said that it cannot work without international co-ordination.

This is because many governments are concerned that if they unilaterally impose a tax, banks will simply move to countries that have not introduced such measures.