Manfred Wiebogen President ACI The Financial Markets Association
Manfred Wiebogen President ACI The Financial Markets Association

Liquidity and stability or taxation and change the whole system?

The global financial crisis has revived the discussion on a financial transaction tax as a means of discouraging international currency speculation, help shrink 'a swollen financial sector' and perhaps simply to raise funds as an international (or national) source of revenue.

For more than one year different (mainly) European politicians have called for options on how the financial sector could make a contribution to pay for government interventions during the crisis, how to raise future tax income and even to use such funding in fighting poverty in developing countries. The discussion itself became more colourful when back in August Lord Turner, head of Britain’s Financial Services Authority (FSA) supported such an idea and Gordon Brown, the British Prime Minister recently shared his views and presented some proposals at the Group of 20 meeting in November.At this stage the discussion around the so-called Tobin tax are supported by some groups (e.g. the IMF by Dominique Strauss-Kahn) but was also for instance refused by the US Treasury Secretary Timothy Geithner and Yves Mersch, European Central Bank Governing Member, who called the initiative a ‘scurrilous idea’ (according to a Dow Jones news wire). What to tax? Today’s call for a financial...continued

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