Robin Hood tax could drive banks away from Romania

Introducing a Robin Hood tax on excessive bank profits would only push lenders away from Romania, according to NBR’s chief-economist Valentin Lazea, cited by NewsIn.

The economist explained that granting NBR an increased power instead would be a much better solution to obtain a similar result. Thus, the central lender should be able to urge banks for recap and if they refuse to do so, they will be coerced to change the management and in extremis even their corporate governance.

“The Robin Hood tax is not an optimal decision because it would breach the capital account freedom Romania agreed to as a precondition to enter the European Union,” said Lazea.

Premier Emil Boc declared on May 19 Romania’s cabinet could take the measure of overtaxing profit if foreign commercial banks in the country fail to go by the agreement with the state and remove financing lines.

The Robin Hood tax could be charged on profits that external banks make at their local subsidiaries. “If foreign banks, through their Romanian representatives, refuse to see they made big time profits here in the good old days and now throw the burden of the crisis on taxpayers, then we can over tax them,” Boc said at public radio station.

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