Lloyds Banking Group PLC (LSE:LLOY) chief executive Charlie Nunn has urged UK policymakers to avoid imposing measures such as a windfall tax on banks, which have been implemented in some European countries.
He reportedly said such measures would harm the banks’ ability to support their customers and shareholders, and create uncertainty for the financial sector.
He made the comments while speaking at the Financial Times’ global banking summit in London on Tuesday.
“The nervousness is the narrative around what we saw in Spain and Italy and Switzerland around windfall taxes, or reserve remuneration, or withholding dividends,” Nunn said, who called for clarity so that banks can operate effectively to support customers.
Nunn’s remarks come amid criticism from MPs and campaigners that banks are profiting from rising interest rates, which have increased the gap between what they charge borrowers and what they pay savers.
Some countries, such as Italy, have introduced a windfall tax on banks to claw back some of the extra profits. Others, such as Switzerland, have reduced the interest paid to banks on their reserves at the central bank.
Nunn’s warnings are likely to influence the political debate ahead of a possible election in 2024, as both Labour and Tories seek to win the support of the City and the business community.