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Banks' Complaining of Taxes Is "Outrageous": Frank
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Deputy News Editor, CNBC.com
The tax on banks proposed by President Barack Obama is likely to become law, while a proposal to set up a fund for unwinding troubled financial institutions has little chance of succeeding, Rep. Barney Frank, D-Mass., told CNBC Friday.
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AP Barney Frank |
"The administration does not want it to be a fund in advance, neither does the Senate so the likelihood is that there will not be such a fund so you will just have the bank tax," the chairman of the House Financial Services Committee told "Squawk Box Europe."
In October Frank proposed legislation that would collect fees from banks with more than $10 billion of assets before the money is actually needed, in the event they would fail.
Concerns about regulatory proposals are growing and analysts say Obama's bank tax would take around $120 billion out of the banking system, while the legislation proposed by Frank could take out up to $200 billion.
Critics of the proposals say the taxes will suffocate banks and they will be unable to lend, but Frank said that, if you add up the amounts advanced by these proposals, "you get two years worth of bonuses."
"Apparently, when they pay each other those enormous bonuses, that doesn't affect their ability to lend," he added.
Banks should accept the fact that taxpayers' money need to be returned and the huge debt incurred by the US government in bailing out the financial system must be reduced, according to Frank.
The banks were the recipients of so much aid that "for them to complain when we try to reduce the deficit in a small way, with a small tax on them, really is outrageous," he said.
On the confirmation of Ben Bernanke as Federal Reserve chairman, Frank said the Republicans who opposed it seemed to forget that initially he was appointed by former Republican President George W. Bush.
The number of votes against Bernanke did not weaken his position at the helm of the Fed because "once you're in, you're in," Frank added.
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