LONDON-Britain is increasing its bank levy to raise £2.5 billion (US$4 billion) this year as a payback for taxpayers' support of the sector during the credit crisis. The government said it acted because of the recent financial strength of the banks, but bankers were unsettled by the move while their critics demanded even higher taxes. The government had planned to phase in the levy to raise £1.7 billion this year and move toward the target of £2.5 billion in 2012.
Treasury chief George Osborne said yesterday the rate was being raised now because banks were in a stronger position than had been believed when the legislation was drafted. "We can move more quickly to the full rate and that's exactly what I have just announced," he said. The levy-0.075 per cent on bank balance sheets-is intended to make a contribution to public finances, which were hurt by the deep recession trigged by the credit crisis. (AP)