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Tax News - Monday 29th June 2009

Worldwide governments look to cash in their rescue chips

Worldwide governments look to cash in their rescue chips

While Gordon Brown is currently at loggerheads with the Bank of England, with Mervyn King particularly critical of the UK government’s strategy, it has emerged that various governments around the world are looking at ways of exiting their various monetary and fiscal policies. Over the next few months we will see the emergence of exit plans and exit strategies to try and recuperate as much of the money spent keeping the worldwide economy afloat as possible.

Unfortunately this will pit governments around the world against the various financial institutions with which they have been bed partners for many years. The shoe is most certainly on the other foot now, with taxpayers demanding repayment of substantial bailout funds and fiscal funding and unfortunately it seems as though the financial sector will be the main area to pay.

However, Gordon Brown and his fellow ministers could find it very difficult to extract the maximum value from the financial sector which will soon factor in these various changes and the effect they will have on company valuations and their profitability. It will be interesting to see who comes out on top because this is a battle of the Titans and one which neither party can afford to lose.

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