The problem that we have had with this banking crisis is that if we start taking away wages or profits from these banks, they will take 6heir expertise elsewhere. This will leave Britain with fewer jobs available and fewer banks around for competition As banks move abroad. However, the International Monetary Fund (IMF) commissioned by the leading 20 economies recommended that all are to apply this excess tax. This would mean that banks would no longer have the power to threaten to move to where fewer taxes are paid. Such a global approach is what we need to ensure the Government’s rule the banks, not the banks ruling the Government as they are at the moment.

An international approach is the only viable solution to excessive bank earnings and the yet un-repaid debts created in the global banking crisis, yes. However, a levy controlled and collected by the IMF raises many issues. Firstly is the issue of how much is too much? Who decides? What will prevent this measure becoming another example of the 'Global North' enforcing its economic priorities on 'the rest of the world'? I suggest that an international tax would have to take into account, as many environmental measures do, global economic divides. Secondly, I find it hard to imagine a situation in which Big Business and big banks, with the influence they wield, would accept what they would describe as quasi socialist steps to infringe on their 'right' to profit in the international free market. This is not an argument to reject an 'excessive earnings tax' outright, but a challenge to the IMF as to how feasible this method really is. Though we may find it distasteful, we must realize the power banks hold in order to create fully viable checks on them. Thirdly, the question here may not be simply a tax on profit, but the introduction of international responsible banking business models, ones that provide an effective external regulation rather than the ineffective self-regulation we rely on today.

We are now coming up to an election. What do politicians do around this time? They start talking that little bit sweeter. They start talking directly to us. They start to say what the public want to hear. After the credit crunch, what do the public want to hear more than the bashing of the bankers? But such a huge dynamic changing decision should not be made on the basis of trying to win votes. The implications have to be thoroughly thought through before any rash decision is made merely to gain popularity

The thing is that banking is an invaluable commodity. To shop online, to secure a booking, to pay via direct debit, to get your wages; very few people could function a life these days without a bank account. But if we charge the banks on ‘excess profits’ then they will pass the charge on. They will charge people for services which people will have no choice as to whether to use or not. Given that the idea behind this tax is to recuperate public money ploughed into the banks, surely this policy fails as it will merely mean the public once again funding the banks!

There were tow suggested taxes that should be imposed on banks to recuperate the money that has been ploughed into them. One was this excess tax, a tax on profits over a certain level and the other was a balance sheet tax; a tax on accumulated profits. The IMF should have recommended the balance sheet tax as this would discourage banks from acting to the detriment of this economy. What it prevents is banks withholding their profits and holding money on their balance sheets. This is bad for the economy as no loans are administered as the banks hold on to more and more of their cash. They would start lending their money out to people if they thought that they would be taxed on it!