Britain's top financial regulator Sunday defended his support for a global tax to curb excessive bank bonuses after a negative reaction from the UK Treasury and industry groups. Financial Services Authority (FSA) Chairman Adair Turner told Sky News his proposals, contained in a magazine article, were a response to politicians and media commentators demanding a crackdown on resurgent bank bonuses. “My message was... stop telling the FSA to go beyond its remit and to start imposing limitations on the level of bonuses, which it is neither within our legal power or our practical ability to do. “If that is an issue you want to talk about, you have to be talking about things like tax,” he said. “What you can't do is say to the regulator, stop them being paid so much.” Turner had told Prospect magazine that “higher capital requirements against trading activities” would be “our most powerful tool to eliminate excessive activity and profits”. “And if increased capital requirements are insufficient, I am happy to consider taxes on financial transactions -- Tobin taxes,” he added, referring to U.S. economist James Tobin, who suggested a tax on foreign exchange transactions in the 1970s but made little headway. Representatives from London's City financial district said such a tax had little chance of succeeding and if imposed in London could threaten Britain's competitive position in the financial services industry. But Turner said it was “ridiculous” to suggest he was wanted to impose the tax unilaterally in London without it being levied in the rest of the world. “Nobody who read the original article would ever have suggested that,” he said. Politicians are struggling to deal with mass unemployment and accuse the financial sector of failing to heed lessons from the credit crunch and returning to “business as usual”. French President Nicolas Sarkozy wants the G20 meeting of top industrial and emerging market countries next month to back a global tax and cap on bank bonuses. German Chancellor, Angela Merkel, also wants a crackdown on excessive pay in the sector.
