Agenda Item 6
Stability Fees
Meeting of the Advisory Expert Group (AEG)
on National Accounts
Luxembourg, 29-31 May, 2013
Peter van de Ven, OECD
What’s the issue?
• Many countries (14) introduced a number of
schemes with levies on banks:
– Payment for deposit insurance
– Instrument to manage financial stability
• Not new, several longstanding deposit insurance
schemes
• Raises questions on the recording of the payments:
taxes versus insurance-type of transactions
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Main types of schemes
• New schemes: revenue base is (part of) the bank’s
balance sheet or the nominal value of derivatives (trading
volume and net stock) => vast majority: taxes
• Government realises the assets of failed banks to
compensate depositors => capital tax (UK, NA) or capital
transfer (UK, treasury) and non-tax revenue (Australia)
• Long-standing schemes with payments consistent with
cost of insurance (?) => insurance (except Canada: taxes)
• Involvement of non-government institution
• Voluntary schemes
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International standards
Criteria for recording as taxes (SNA 2008)
• Payments should compulsory
• Payments should be made to government
• Payments should be unrequited => payments clearly out of all
proportion to the costs of providing the services
Possible additional criteria (GFS Manual)
• Disconnect between payer of levies and receiver of the benefits
• Service is fairly general (collective), not specific (individual)
• (Non-)proportionality at the individual level
Note: Existence of a special hypothecated fund
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Further discussion of deposit
insurance schemes
Proportionality of the payments:
• Here: service component + risk component relevant
• After the exceptional events of the financial crisis: nearly
impossible to evaluate the proportionality
• Retrospective element => “excessive rates” => taxes
1st proposal:
• New schemes: taxes, unless clear evidence of proportionality
• Long-standing schemes: insurance, unless clear evidence of nonproportionality
2nd proposal: always taxes, unless clear evidence of proportionality
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Further discussion of realisation of
assets to compensate depositors
Appropriation of assets:
• Capital tax or capital transfer?
• Recording as taxes inconsistent with SNA-definition: levies “at
irregular intervals on the values of the assets or net worth or on
the values of the assets transferred between institutional units”
• Taxes only relevant for additional levies in the case of shortfalls
Compensation of depositors:
• Capital transfer => asymmetry with recording of losses on
deposits as “another change in the volume of assets”
Proposal: No recording of transactions, simply treat it as
winding down the bank
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Summary proposals
• Steady state long-standing schemes: insurance, unless clear
evidence of non-proportionality
• New schemes: taxes, unless clear evidence of proportionality
(irrespective of existence of hypothecated funds and regardless
of government having a contingency to guarantee the deposits)
• Compulsory payments to schemes managed by public
corporations/funds:
– If government fully determines pricing policy and guarantees any
shortfalls => part of government; treatment as taxes
– If not, treatment as non-tax payments
• Realisation of assets to compensate depositors: Not to be
accounted for; levies in case of shortfalls to be treated as taxes;
minor excess of assets to be treated as payment for services
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Thank you for your attention!
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