A "Tobin" style tax on financial transactions is not the best way to raise cash for bank bailouts, a senior official from the European Union's executive body said on Wednesday.

The G20 group of leading countries asked the International Monetary Fund at a meeting in Scotland last month to come up with options by April for a possible transaction tax, "insurance" levy or resolution fund paid for by banks.

It would help refund taxpayers for huge bailouts and pay for future rescues.

The European Commission, which participates in the G20, told a European Parliament hearing on transaction taxes it was not working on such a proposal, there were doubts about its impact, and several issues need clarifying.

"It leads us to the clear conclusion that such as tax is not the right instrument. It's not a secure instrument," said Alexander Wiedow, a director in the commission's tax unit.

Read it all.

Filed under: * Economics, Politics • Economy • Stock Market • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • * International News & Commentary • Europe

Registered members must log in to comment.