ABI relieved after G20 rejects levy

The ABI has expressed relief at the G20’s rejection of the International Monetary Fund’s proposed levy on financial services companies.

The group’s regular quarterly meeting of finance ministers, which took place last weekend in the South Korean city of Busan, dropped the controversial levy.

Peter Vipond, director of financial regulation at the ABI, said: “The rejection by the G20 of a bank levy is good news for insurers who faced the risk of an all-encompassing levy from the original IMF proposals.

“We are pleased the G20 finance ministers have listened to insurers, throughout the world, who had argued that extending such a levy from banks to insurers and other financial services was inappropriate and not justified.

“However we must still be vigilant and we will continue to lobby the UK government to ensure any domestic measure is correctly targeted. Insurers were not a source of failure and their business model means they are not subject to the types of credit and liquidity risks that destroyed so many banks. Any inclusion of insurers within the scope of levies designed to impact on banks is essentially inappropriate and not justified.”