More to Do on Financial Sector Tax, Says IMF’s Lipsky

In an interview from Davos, Switzerland, the IMF’s First Deputy Managing Director John Lipsky said that although the mood among delegates is more upbeat than it was one year ago during the crisis, people still have concerns about the resilience of the economic recovery.

In its latest world economic outlook, released just ahead of the World Economic Forum meeting in Davos, the IMF is forecasting that world growth will bounce back from negative territory in 2009 to 3.9 percent this year and 4.3 percent in 2011.

Lipsky also said it was clear that decision makers feel under intense political pressure to act on financial sector regulation. A consensus on how to move ahead on a financial sector tax hasn’t emerged yet, but Lipsky said that a process initiated by the G-20 industrialized and emerging market countries will play a key role in making decisions about the issue.

The G-20 process, for which the IMF has been asked to supply an options paper, would have “ a critical role in helping to coalesce the political authorities around a single set of ideas,” he said.

At a summit in Pittsburgh in September 2009, G-20 leaders asked the IMF to prepare the paper in time for their June 2010 meeting laying out a range of options for financial sector taxation. A preliminary version of the options paper will be ready for discussion at the April 2010 G-20 ministerial meeting.

also posted on the Huffington Post

One Response

  1. If some of the other countries with similar problems to Greece follow suit, it looks like an uptick in 2011 is pretty optimistic. As to financial regulation, at least in the US, the big banks have hired an army of lobbyists to insure they pretty much get what they want. As long as we allow such lobbying, no significant regulation will ever be passed. My belief is at best we’ll get a very ‘watered down’ bill that changes little.

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