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ABI Treasury should recognise differences within the financial sector

Responding to HM Treasury's discussion document report, Risk, reward and responsibility: the financial sector and society, released today, Peter Vipond, the ABI's Director of Financial Regulation and Tax, said:


"Yet again, the Government is suggesting sweeping reforms of the financial sector with no recognition of the differences between banking and other financial organisations. Insurers and banks have very different business models and should not be treated in the same way.  Insurers did not cause the financial crisis and have emerged from it with their business intact and with no disruption to its customers.


"It is particularly worrying that a proposed ‘systemic risk scheme' would look for contributions from non-banking financial organisations to pay for future bank rescues.  This is despite no UK-based insurers having received Government money in this crisis.  We dispute this idea is workable or to the benefit of insurance industry customers or shareholders.


"The Treasury is right to stress that a Tobin tax can only work if adopted internationally.  Without global agreement, this could harm the UK economy."


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Last updated 01/07/2016