[Under Development]

German Chancellor Angela Merkel and French
President Nicolas Sarkozy have renewed calls for a global bank levy and a
financial transaction tax.

The two leaders said they would call for the
measures in a joint letter to the president of the G20 ahead of a summit later
this month.

G20 finance ministers had distanced themselves from
bank taxes at a meeting earlier this month.

A bank tax would protect taxpayers from having to
bail-out banks in the future.

Proceeds from the taxes would go into a fund that
could be accessed during any future financial crises.

A number of countries have been calling for taxes
on banks since governments spent billions of dollars bailing out banks across
the world following the financial crisis that began in 2008.

However, so far there has been no agreement.

'Not satisfied'

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

Following a meeting of finance ministers earlier
this month, many commentators thought the resolve for bank taxes was weakening.

The French and German leaders are looking to
strengthen this resolve once again ahead of the next G20 meeting in Toronto on
26-27 June.

"We are not yet satisfied with what's been
achieved since the first G20 and we think we need to forge ahead on
regulation," said Mrs Merkel.

According to the Reuters news agency, European
Union leaders will agree in principle on Thursday to introduce a levy on
financial institutions, after which the details will be worked out by the
European Commission.

"The European Council agrees that a levy on
financial institutions should be introduced to ensure that they contribute to
the cost of crises," draft conclusions of a council meeting said, Reuters
reported.

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