Are there tax policy or economic reasons to exempt from VAT the value of financial intermediation services?

a. If these services are exempt, how should the exemption be provided? How should financial institutions calculate their VAT liability? 

b. If financial services are exempt from VAT, financial institutions have an incentive to provide internally some services previously purchased from outside vendors. For example, suppose that before VAT is enacted, Bank purchased cleaning services from a maintenance firm for $100,000. With the adoption of VAT, the maintenance firm would add $5,000 VAT (assuming a 5 percent VAT) to the Bank’s bill. Bank cannot claim credit for the $5,000 VAT. How can the VAT statute prevent this incentive toward vertical integration? What purchases should be covered by this rule?