Taxpayers should not have to bail out banks, says Myners
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Opening a financial services seminar at Number 11 Downing Street today, Financial services secretary Paul Myners says taxpayers should not be called upon to bail out failed banks again.
Officials from each of the G7 nations, as well as the International Monetary Fund, Bank of England and Financial Services Authority, will attend the seminar today.
He says governments were forced to step in and use taxpayer money to prevent a complete financial meltdown and thus a much deeper crisis.
But says: “Going forward it is important that any costs that governments incur for interventions in the financial sector are distributed more fairly.
“There is clearly a strong rationale to charge for the externality caused by the financial sector and financial institutions should shoulder the responsibilities for losses they may face.”
Myners says work is being done at national and international levels to reduce the probability of failure.
He adds: “Numerous innovative ideas including contingent capital and systemic risk levies have recently emerged to increase the resilience of the financial system globally and to ensure that the costs of any future failures primarily fall to banks and bank investors rather than taxpayer.”
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