Banks To Face New Levy Courtesy Obama?

The Obama administration is planning to impose a new levy on top US banks, to pay for the financial bail-out as part of the budget to be presented in February. The surcharge will aim to recoup the full cost of the TARP bail-out fund, which the administration estimates at $120bn, although officials expect the ultimate cost will be less than $100bn.

The proposal comes as the administration faces increasing pressure from Democrats in Congress to take punitive action against banks. The White House is trying to contain anger in a week in which banks will begin announcing billions of dollars in new bonuses. This has turned into a crunch week for banks, with chief executives from banks including Goldman Sachs (NYSE: GS) and JPMorgan Chase (NYSE: JPM) due to testify on Wednesday at the first public hearing of the Financial Crisis Inquiry Commission, a bipartisan inquiry established by Congress.

Obama has always been a stickler for greater financial control and supervision of banks and the financial system, including bonuses to top executives, right from prior to his 2009 Presidential campaign days. These recent moves can be seen in the light of his general views and public stance vis-à-vis these financial giants.