Insurers launch attack on financial reforms

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The Independent Online

Insurers have blasted Government proposals that they contribute to a fund to prevent fresh calls on tax-payer funds to bail out banks. They are furious that they could be asked to pay into a "systemtic risk scheme" to fund future rescues and argue that they have emerged from the storm virtually unscathed, causing none of the problems of the banking sector. Peter Vipond, the ABI director of tax and regulation, said: “Yet again, the Government is suggesting sweeping reforms of the financial sector with no recognition of the differences between banking and other financial organisations.

"Insurers did not cause the financial crisis and have emerged from it with their business intact and with no disruption to its customers."

Mr Vipond said the ABI "disputed" whether such as scheme would be workable or to the benefit of insurers, their customers and their shareholders. He also said that the so called "Tobin tax" on financial transactions to fund bail outs could only work if adopted internationally.

"Without global agreement, this could harm the UK economy." he said in the Treasury paper, 'Risk Reward and Responsibility: The Financial Sector and Society'.

It will go to the International Monetary Fund, which is preparing a report on measures taken to address the financial crisis. The Treasury said it was "intended to contribute to the international debate".