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Slovakia’s cabinet approves special bank levy

Commercial banks operating in Slovakia will pay a special levy based on 0.2 percent of a certain part of their liabilities to a special state financial assets account, according to draft legislation approved by Slovakia’s cabinet on September 21, the TASR newsier reported.

Commercial banks operating in Slovakia will pay a special levy based on 0.2 percent of a certain part of their liabilities to a special state financial assets account, according to draft legislation approved by Slovakia’s cabinet on September 21, the TASR newsier reported.

The Finance Ministry expects that the bank levy will cost the banks about 8 percent of their profits before tax and will bring the state additional revenue of around €50 million each year, TASR wrote. The cabinet said the draft is designed to create mechanisms that will cover the cost of financial crises and stimulate banks into reducing systemic risk, thus protecting the stability of Slovakia's banking sector.

The basis for calculating the 0.2-percent levy will be a bank’s liabilities minus its equity and the amount of deposits it has under Slovakia’s deposit protection system.

"Banking entities should neither pay deductions [the levy] from their own capital resources, as increasing them is a long-term goal in line with the Basel recommendations aimed at combating the crisis, nor from their customers' deposits, from which banking entities are already deducting contributions for the Deposit Protection Fund," said the Finance Ministry.

According to provisional data provided by the Slovakia’s central bank, TASR wrote that the total amount of bank liabilities that will form the basis for calculating the levy was €25.5 billion at the end of 2010.

Source: TASR

Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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