http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/699...

Britain's three biggest banks are to be forced to pay more than $11bn (£6.7bn) as part of the $90bn super-tax President Barack Obama intends to impose on the US financial services industry in order to repay American taxpayers for their $700bn assistance in the financial crisis.

The three – Barclays, HSBC and Royal Bank of Scotland – will be caught by the US Financial Crisis Responsibility (FCR) fee due to their sizeable operations in the US, which wants to recoup losses stemming from its $700bn bail-out of the banking sector.

Barclays is expected to be the worst hit, on the hook for a levy of as much as $680m a year over the next ten years, according to analyst David Hendler at CreditSights.



HSBC and RBS are, according to forecasts from Execution, set to face annual payments of around $380m and $90m respectively.

President Obama is introducing the decade-long tax to tackle what he called "massive profits and obscene bonuses," at banks "who owe their continued existence to the American people," saying his intention is not to punish Wall Street, but to prevent further abuses and excess.

the US President said he intends to recover "every single dime" US taxpayers are owed: "We want our money back, and we're going to get it. We cannot go back to business as usual."

The tax will be levied annually, as 0.15 percentage point fee of covered liabilities. It will only apply to institutions with assets of more than $50bn, capturing 35 US banks and 15 foreign ones.

The tax will form a central part of President Obama's budget for the 2011 fiscal year, and will be levied annually for either ten years, or until losses outstanding from the bail-out have been repaid.

Current estimates put the loss at $117bn, although Treasury officials expect that to reduce to around $90bn, the amount the tax should raise over the course of a decade.

The tax is structured to penalise the riskiest activities, targeting activities funded through the wholesale money markets, rather than insured deposits held in retail banks. As a result, investment banks will be hit hardest, with Goldman Sachs estimated by Betsy Graseck, banks analyst at Morgan Stanley, to be facing a $768m bill, and Citigroup an annual charge of $1.44bn.

President Obama urged bank boards not to pass on the fees to shareholders or customers, but instead roll bank bonuses for senior executives and "consider meeting your responsibility."

The Whitehouse also said it was not ruling out taking legislative action in future on bank bonuses. The FCR fee, which will be subject to Congressional approval, is the US's alternative to the UK's tax on banker's bonuses.

Professor Stefano Harney, of Queen Mary Univeristy's school of business and management, said that the argument that banks might flee London as a result of the 50pc tax on bonuses is "now dead and buried." This "news...ought to ensure that new taxation for the City of London becomes a permanent feature of the landscape here," he said.

Barclays, RBS and HSBC all declined to comment.

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