Taxing Banks

The financial crisis of 2008 left no doubt as to the need for improving bank regulation. Some proposed improvements have materialized, most notably those contained in Basel III (The Third Basel Accord, a global, voluntary regulatory framework on bank capital adequacy, stress testing and market liquidity risk), but the process is still on-going.


Several new financial sector taxes, including bank levies, Financial Transaction Taxes and Financial Activities Taxes, have been enacted both at a domestic and a supra-national level. Whilst the debates on the latter two taxes are still underway, new bank levies have been introduced in the UK, Germany, France and 7 other EU member states. Other countries are expected to adopt similar levies in the foreseeable future.


The purposes of these levies vary, but they principally include encouraging banks to hold more Tier 1 capital, i.e. the core measure of a bank’s financial strength from a regulator’s point of view, constituting core capital, which consists most notably of common stock and disclosed reserves (or retained earnings), but may also comprise non-redeemable noncumulative preferred stock. Other purposes include: addressing liquidity risk and making banks pay a contribution reflecting the risk they pose. They are thus partly intended to achieve the same goals of regulatory reforms currently in progress.


The use of taxes to achieve these regulatory goals is a new phenomenon and as such requires careful consideration. To begin with, we ought to consider which of the two, regulation or tax, is more appropriate to achieve these goals. More practically, as the two will be in place concurrently, we need to consider the interaction between them.


Our understanding of the issues arising from the new financial sector taxes and, in particular, their interaction with regulation is still at an initial stage. Ideally, an exploration of these issues would require expertise in both bank regulation and tax.

Adapted from www.sbs.ox.ac.uk


Exercise 1
Find the words or expressions in the text which mean the following:

1) sth has become reality: __________
2) not forced: __________
3) a mandatory fee: __________
4) to make sth the law: __________
5) sth differs: __________
6) the most important indicator of sth: __________
7) in this way: __________
8) not entirely: __________
9) thinking about sth deeply: ___________
10)suitable / right: __________
11)to result from sth: __________
12)specialist knowledge: _________


Exercise 2
Match the expressions from the two columns into logical collocations:

1) to leave no doubt          process
2) a regulatory                   underway
3) stress                              level
4) market                           a risk
5) an on-going                  member states
6) on a supra-national    as to sth
7) a debate is                    testing
8) in the                            framework
9) EU                                 foreseeable future
10)to pose                         liquidity risk


Exercise 3
Provide English equivalents of these expressions:

1) regulacja sektora bankowego
2) przede wszystkim
3) zawarte w …
4) Porozumienie Bazylejskie III
5) adekwatność kapitałowa
6) podatek od transakcji finansowych
7) opłaty nałożone na banki
8) kapitał podstawowy
9) akcje zwykłe
10)zyski nierozdzielone
11)akcje uprzywilejowane
12)ryzyko płynności



Grammar corner…

In the text you have seen words that refer (talk about) other words. You may think of them as words that take your attention back to what was previously said. Today you will learn some of them. Very often you would like to say „if we’re talking about sth”, which can be expressed in many ways, for instance: as regards sth, with regard to sth, regarding sth, speaking of sth, when it comes to sth, in terms of sth, in (adjective) terms, as for sth, as to sth, apropos of sth. Impressive, eh? At least ten phrases to express one thing.


Exercise 4
Fill in the sentences with ONE word that best completes them.

1) With ____________________ to your request, I’m sorry to say that, but I have to deny it.
2) Speaking ____________________ your Christmas bonus, we won’t be paying it this year because of the company’s financial condition.
3) As ____________________ the efficiency, electric cars waste much less energy than traditional vehicles.
4) In economic ____________________ the proposal is disastrous, but the voters will love it!
5) Here’s the thing about him as manager, ____________________ terms of efficiency he’s great, but the people hate him.
6) When it ____________________ to my holiday plans, well, I don’t have any so far.
7) Apropos ____________________ your previous comment, I strongly disagree.
8) As ____________________ what you said before, this is pure nonsense.
9) ____________________ your application dated March 17, 2015, we are pleased to inform you that it has been accepted and we would like to schedule an orientation meeting with you.
10)Speaking ____________________ food, what are we having for lunch?


sth has materialized – coś stało się rzeczywistością
voluntary – dobrowolny
a levy – opłata
to enact sth – wprowadzić coś w życie
sth varies – coś różni się
a core measure of sth – główny wskaźnik czegoś
thus – w ten oto sposób
partly – częściowo
careful consideration – dogłębne rozważanie czegoś
appropriate – właściwy
to arise from sth – wynikać z czegoś
expertise – wiedza specjalistyczna
to leave no doubt as to sth – nie pozostawiać wątpliwości odnośnie …
a regulatory framework – ramy regulacyjne
stress testing – testowanie w warunkach skrajnych
market liquidity risk – ryzyko płynności rynku
an on-going process – proces w toku
on a supra-national level – na poziomie ponadnarodowym
a debate is underway – debata trwa
in the foreseeable future – w najbliższej przyszłości
EU member states – państwa członkowskie UE
to pose a risk – stanowić ryzyko
bank regulation – regulacja sektora bankowego
most notably – przede wszystkim
contained in – zawarte w
III Basel Accord – Porozumienie Bazylejskie III
capital adequacy – adekwatność kapitałowa
financial transactions tax – podatek od transakcji finansowych
bank levies – opłaty nałożone na banki
tier 1 capital – kapitał podstawowy
common stock – akcje zwykłe
retained earnings – zyski nierozdzielone
preferred stock – akcje uprzywilejowane
liquidity risk – ryzyko płynności


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Ex. 1
1) sth has materialized
2) voluntary
3) a levy
4) to enact sth
5) sth varies
6) a core measure of sth
7) thus
8) partly
9) careful consideration
11)to arise from sth
Ex. 2
1) to leave no doubt as to sth
2) a regulatory framework
3) stress testing
4) market liquidity risk
5) an on-going process
6) on a supra-national level
7) a debate is underway
8) in the foreseeable future
9) EU member states
10)to pose a risk
Centrum Języków Obcych Archibald poziom B1/B2
Ex. 3
1) bank regulation
2) most notably
3) contained in
4) III Basel Accord
5) capital adequacy
6) financial transactions tax
7) bank levies
8) tier 1 capital
9) common stock
10)retained earnings
11)preferred stock
12) liquidity risk
Ex. 4
1) regard
2) of
3) for / to
4) terms
5) in
6) comes
7) of
8) regards
9) Regarding