There's More to Do on Financial Sector Tax

Although the mood among delegates here in Davos is more upbeat than it was one year ago during the crisis, people still have concerns about the resilience of the economic recovery.

In its latest world economic outlook, released just ahead of the World Economic Forum meeting in Davos, the IMF is forecasting that world growth will bounce back from negative territory in 2009 to 3.9 percent this year and 4.3 percent in 2011.

It is clear that decision makers feel under intense political pressure to act on financial sector regulation. A consensus on how to move ahead on a financial sector tax hasn't emerged yet, but that a process, initiated by the G-20 industrialized and emerging market countries, will play a key role in making decisions about the issue.

The G-20 process, for which the IMF has been asked to supply an options paper, will have a critical role in helping to coalesce the political authorities around a single set of ideas.

At a summit in Pittsburgh in September 2009, G-20 leaders asked the IMF to prepare the paper in time for their June 2010 meeting laying out a range of options for financial sector taxation. A preliminary version of the options paper will be ready for discussion at the April 2010 G-20 ministerial meeting.

From the iMFdirect blog