Obama to levy $90bn bail-out fee on banks
It is payback time for banks in America
President Obama is reportedly planning to impose a sweeping tax on banks to recoup the $90 billion of tax payers' money that was used by the administration to bail them out of the financial crisis under TARP (the troubled asset relief program).
The "financial crisis responsibility fee" will be levied on about 50 financial institutions - expected to be those holding at least $50bn in assets each - for a period of ten years.
The new tax is expected to come into effect from June this year.
It is designed to raise about $90bn over the next decade by levying a fee of about 15 basis points on covered liabilities.
The move comes a few days before the period when the banks are set to announce payment of record bonuses running into billions of dollars to their staff.
The levy is being seen as an attempt by the US government to cool down public anger over the huge bonus payoffs after the banks helped themselves to hundreds of billions of dollars of government funds.
US officials said the tax is being introduced to ensure that the cost of the banks' bail-out is borne by the financial industry itself and not the tax payers.
Interestingly, the new tax will also be applicable to large banks and insurance companies which did not receive any bail-out assistance from the government.