Biggest banks to bear brunt of levy

Part of the government's 2011 Finance bill, the new levy comes into effect on 1 January and aims to make banks pay for the risk they pose to the economy and encourage long-term lending. But the country's largest institutions will be disproportionately impacted by the levy which will not apply to lenders with a balance sheet of less than £20bn. According to a consultation paper, the levy rate in 2011 will be 0.05% of a bank's balance sheet, rising to 0.075% in 2012. The government expects the levy to raise £8.8bn between 2011-2014, with the UK's top five largest banks - HSBC, Barcla...