Global FDIC supported at Davos

World’s leading bankers at the World Economic Forum in Davos have decided to support a new insurance levy on financial institutions to fund a bailout in future.

Led by Deutsche Bank, most major banks have agreed to back the idea, which the International Monetary Fund (IMF) has described as “practical”. The levy would go into a fund to rescue banks in financial distress, instead of using taxpayers’ money for the purpose…

US President Barack Obama had earlier revealed plans to force banks to pay into a pool fund to provide compensation for a failing financial institution.

David Cameron and Chancellor Darling have both backed the plan.

The levy is among a number of options outlined by the IMF, which will be presented to G20 ministers in April.

So, we get a few sentences of agreement, right now. The details will be presented to the G20 in a couple of months when we’ll have a clearer picture, the financial institutions in question will have a finished agreement to vote up or down.

To me, it makes as much sense as the FDIC did back when it was born in 1933 – to cover the buns of American banks. It’s worked ever since.

In fact, if the Republican flunkey-monkeys in Congress hadn’t killed the Glass-Steagall bill in 1999 – and the matching range of oversight regulations – we might not have fallen into this killer recession.

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