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IMF recommends decreasing bank levy
19 Aug 2013 Flash News
Slovakia should decrease its bank levy, according to the report on the Slovak economy issued by the International Monetary Fund (IMF), the SITA newswire reported on August 16.
“Bank taxes have risen at a time when the operating environment is weak and credit to firms is declining, hitting profits,” reads the IMF’s report. “The levy should be lowered to be more in line with other countries in Europe and the proceeds allocated to a more well-defined special resolution fund.”
According to the Slovak Banking Association (SBA), Slovak banks were among those that were burdened the most among other European Union member states last year. The amount they paid was 10 times higher than the average of the countries that imposed the new tax, as reported by SITA.
“The inappropriately high bank levy, which we are witnessing in Slovakia, creates the risk of a negative impact on the number of lending by companies in the medium term,” said Ladislav Unčovský, executive director of SBA, as quoted by SITA.
Also, IMF predicts there is an impact of the bank levy on the lending.
“There is a risk that additional burdens on banks may hamper the transmission of supportive monetary conditions to the real economy,” the IMF report reads.
The report also states that a traditional banking model and prudent supervisory approach have contributed to a sound banking system, and that the banking system in Slovakia is liquid and well capitalised, with low and well-provisioned NPLs, although a weaker economic outlook could affect credit quality.
Source: SITA, IMF report
Compiled by Radka Minarechová from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.
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