FRANKFURT (Reuters) - Former U.S. Federal Reserve Chairman Paul Volcker, who now advises President Obama, thinks Britain’s special tax on hefty bank bonuses is “interesting” but is wary about imposing levies on financial market transactions, he told a German newspaper.
Told by the Welt am Sonntag weekly that German Chancellor Angela Merkel had described the British plan as “charming,” Volcker said he found little charming about financial markets at the moment.
“But the British idea is interesting. People are angry that workers in the financial sector make so much money. And this massive compensation promoted behavior that destabilised the financial markets,” he said in the German translation of his remarks printed on Sunday.
London’s surprise tax on big banker bonuses has unleashed a clamorous global debate on the step.
Volcker said he “instinctively opposed” any tax on financial transactions, a step that proponents say could limit the risk of another economic crisis.
“But it may be worthwhile to look into the current proposals as long as the result is not predetermined. That would at least end all this renewed talk about the idea, but overall I am skeptical about these ideas.”
Reporting by Michael Shields; editing by Simon Jessop