Here is the letter from Gordon Brown to all EU leaders today: http://www.number10.gov.uk/Page21696 In particular we should: 1. Actively support and contribute to the IMFâs work on how the financial sector could contribute to paying for burdens associated with government interventions to repair the banking system. This should include the full range of options, including an insurance fee for systemic risk; a resolution fund; contingent capital arrangements and a financial transactions tax. 2. Invite our Finance Ministers, assisted by the Commission, to build on the work programme they have already agreed and identify the key principles which new global arrangements would need to respect, to inform further discussion of these important issues at next yearâs IMF and World Bank Spring Meetings. I look forward to our discussions. Yours sincerely Gordon Brown
The problem is here : "A number of proposals have been made to ensure that the financial sector pays for the systemic risk that must be borne by the rest of the economy: these include proposals for contingent capital and capital insurance, and for systemic risk levies to finance resolution funds. And in order to address the wider issue of the contribution that the sector should make to wider social and economic objectives, some have called for this issue to be addressed through a general financial transaction tax."
What perhaps the trading community along with the banks and exchanges should seriously consider is to move business where the trading community and the listed securities will never have the likes of US or EURO populism interfere with our businesses..... Perhaps the exchanges should be moved to Hong Kong, Switzerland, Singapore, and even Dubai.....which needs business more than ever..... Transactions could take place anywhere...ie via BATS.... BATS has the full capability as a total exchange.... .............................................................. Listed companies and all facets of the supplied securities could easily be traded where the business can and should be conducted most efficiently.... I see no reason not to form such a consortium....in the name of our livlihoods.....and the betterment and efficiency of capital which spurs progress and innovation.... It took years of struggle to win out versus market makers and specialists.....via efficiency.... Thus why go backwards.... I am certain that either of these countries would be anxious to have themslves be the real financial hub of the world.... The US, EURO populists are digging their own graves.... I say let's do it.....regardless of what the US....EURO polys....come to....The mere fact that they can try to threaten our livlihoods is reason enough.... The IMF.....only a few months ago the IMF was becoming irrelevent....Now they are the focal point of intelligence ? I do not think so.... I say enough of this US EURO Poly bullshit .... What about you ?
The more and more I read I think our biggest problem is the int'l momentum this trans tax seems to be gaining. I hope I'm wrong but it just seems like everyone else wants this tax. Let's just hope the US stays strong and continues to oppose it. Although I do believe there is no way possible to get the entire G20 to agree to the tax. I don't like the fact that Merkel from Germany came out again in favor of the tax after last week they said they were against it... According to Bloomberg Gordon Brown is gaining in the polls since he started cracking down on the banks: "Brown is also preparing to fight an election by June next year. He has narrowed the opposition Conservative partyâs lead in the opinion polls since September in part by attacking bankers. Five polls since the beginning of November have signaled the Conservative lead over Labour is narrow enough to deny the opposition an outright victory in the election." http://www.bloomberg.com/apps/news?pid=20601087&sid=aq.yXXceksVw The same piece also says the US most likely won't follow Britains lead and tax bank bonuses here in the US: "U.S. lawmakers already wary of expanding the governmentâs role in running financial companies probably will avoid matching the U.K.âs tax on banker bonuses. The U.S. Treasury is unlikely to impose a similar levy which could cause an âexodus of talent,â said David Schmidt, a senior consultant for New York- based compensation firm James F. Reda & Associates."
The rates are not set yet. I will keep you posted as my sister works in the Danish Parliament, so she keeps me posted The difference between the EU and the US is that the Europeans does not want to destroy the traders nor liquidity, they want additional funds, primarily to cover foreign aid. While Defazio wants to destroy anyone who trades frequently and thinks liquidity is just a buzzword. France and Germany does not currently want the rate to be set above 0.05% per side, but have said nothing about derivatives - which i trade myself. Only time will tell. I hope the industry is lobbying hard against this.
................................................................................. Why do you not ask about market maker exemptions ? Who is going to make the markets ? This is the real question.... At .05....there is no way that market making can pay this....thus no market for securities.....
A big world event needs to occur to get the minds of Politicians & the General Public off the obsession of attacking the financial sector. It's a feeding frenzy now. The General Public blames the Banks for their own financial problems, and the Politicians feed off that hate & keep attacking & attacking as they watch their poll numbers rise.
I did. This was all she knew, they just agree that they want to push for the tax, but it is clear that they haven't thought out the details, such as rates on futures, options and FX. They are waiting for the IMF report in April to sort that out, but ALSO to compare that to the other options besides a Transaction Tax. (I shiver whenever i have to write those two words) These are politicians, if they were smart economists, they would oppose it.