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Bank levy of 0.05% will raise £2.5bn a year, says Hoban

Mark Hoban
Mark Hoban: ’Levy is fair contribution’

Mark Hoban, financial secretary to the Treasury, has revealed the final details of the government’s bank levy.

The levy, which was announced in the June Budget, will apply to lenders with a balance sheet of more than £20bn.

The rate for 2011 will be 0.05%, rather than 0.04% previously ann-ounced, and will rise to 0.075% from 2012, instead of the 0.07% ann-ounced in the Budget.

Hoban says the levy will raise £2.5bn a year, which he says is a fair contribution in respect of the risks the banking system poses to the wider economy.

The levy takes effect from January 1 2011 and will be permanent.

Hoban says: “We have consulted on the design of the scheme so that it achieves two objectives. The first is to ensure that banks make a fair contribution in respect of the potential risks they pose to the UK financial system and wider economy.

“And second, the scheme will en-courage banks to make greater use of more stable sources of funding, such as long-term debt and equity, working with the grain of our wider reform programme.”

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