U.S. financial industry lobbyists are not pleased with the Obama Administration’s plan to impose a tax on bank liabilities as a way of recouping the taxpayer funds spent on bank bailouts during the financial crisis.

U.S. President Barack Obama said that he will propose a Financial Crisis Responsibility Fee to be imposed on the debt of the largest financial firms until U.S. taxpayers are fully compensated for the assistance provided to the financial industry. The fee will be in place at least 10 years, and will apply only to firms with more than US$50 billion in assets. It aims to raise up to US$117 billion to cover the cost of the bailout.

“My commitment is to recover every single dime the American people are owed. And my determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at the very firms who owe their continued existence to the American people – who have not been made whole, and who continue to face real hardship in this recession,” said Obama.

“That’s why I’m proposing a Financial Crisis Responsibility Fee to be imposed on major financial firms until the American people are fully compensated for the extraordinary assistance they provided to Wall Street.”

The Securities Industry and Financial Markets Association’s president and CEO, Timothy Ryan, released a statement expreessing concern about the plan.

“While we are still learning details of the Administration’s new proposed tax, we are concerned to learn that the government would consider this approach rather than first collecting all outstanding TARP loans plus interest in accordance with the law, and then determine a strategy to recoup any remaining monies,” he said.

Ryan also noted that SIFMA has concerns about fairness within the industry. “We are also concerned that since it appears deposits are excluded, this tax will have a disproportionate impact on wholesale capital markets,” he said.

“The American taxpayers put their hard earned funds at risk to save our financial system, we are grateful, and we believe it is our responsibility to repay American taxpayers. To that end, we strongly believe that all TARP recipients should pay their loans back with interest in accordance with the TARP law,” Ryan stated.

IE