Bank levy rates
The Chancellor has announced a change to the bank levy rates with effect from 1 March 2011. The bank levy rate will be increased so that the bank levy will raise the target yield of £2.5 billion for the first year.
The rates for the two-month period 1 March 2011 to 30 April 2011 will be 0.1% for short-term chargeable liabilities and 0.05% for long-term chargeable equity and liabilities. The rates applicable from 1 May 2011 and for the rest of the calendar year will be 0.075% for short-term chargeable liabilities and 0.0375% for long-term chargeable equity and liabilities. The full bank levy rates are applicable for the calendar years 2012 onwards.
The bank levy is intended to encourage banks to take on less risky funding profiles, improve regulatory standards and enhance the financial stability of the UK banking industry. The levy will apply to the global balance sheets of UK banks as well as to the UK operations of banks from other countries.