http://www.efinancialnews.com/investmentbanking/content/1056027739/ City greets Tobin tax calls with fresh scepticism Matt Turner 11 Dec 2009 The City of London reacted with scepticism this morning to the UK Treasury's call for discussions on the issue of implementing a transaction tax, with industry experts questioning whether the government was using the threat of the levy as a negotiating tactic to drive wider regulatory reform. The UK Treasury yesterday published a discussion paper entitled 'Risk,reward and responsibility: the financial sector and society', which set out the government's stance on how the financial sector might contribute to the potential costs of any risks it poses to taxpayers. In it, the Treasury put forward a number of proposals, including different types of insurance funds paid for by banks to help fund bailouts, and a financial transaction, or Tobin, tax. Jonathan McMahon, a director at regulatory consultancy Promontory, said that the Treasury may be using the threat on a Tobin tax to push action on regulation elsewhere in the industry. He said: "I do wonder if this is really a negotiating tactic, the threat being that if a financial institution is unhappy about new liquidity and capital rules, then it could be far worse if regulators feel compelled to implement more drastic measures like a transaction tax. I wouldn't expect this to happen, though." Richard Reid, director of research at the International Centre for Financial Regulation, said: "Maybe the Treasury hopes that the threat of such a tax will encourage progress elsewhere in the regulatory debate." He added: "The paper again reiterates the UK view that, to be workable, such a tax would need to be: implemented at a global level, have a minimal distortionary effect, ensure financial stability, and be fair and measured. How to define all of these would seem to be a major challenge." Robin Johnson, partner at law firm Eversheds, agreed that such a tax would be unworkable unless all governments agree to implement it to the same degree. He said: "Otherwise, it is a pie in the sky idea. Regulators must realise this." The Treasury said in the paper that any proposals for such a levy "must have the commitment of all the major international financial centres in order to work", but said "such coordination may now be more likely". A number of European nations have expressed interest in the proposals, with Germany, France and Austria having set out support for the measure. However, the US remains against such a tax. The IMF is due to report to the G20 on how the financial sector should make a contribution toward paying for government intervention next year with a preliminary report due in April and the final report due in June. A spokesman for the Treasury confirmed that the UK would not act on any policy related to a transaction tax until after the final report, by which point a general election will have been held in the UK. The Labour Government, which has been a prominent backer of a transaction tax, is trailing the opposition Conservative party by around 8% in the latest polls.
The IMF will work on the uses of a banking transactions levy, known as a Tobin tax, after Angela Merkel, the German Chancellor, added her voice to the EU support for the idea. "I do not use the term Tobin tax because that is a particular type but we have made clear we want the IMF to deliver proposals." Mr Brown added: "This world deal at Copenhagen must be ambitious, global, comprehensive, legally binding within six months. We have agreed this: it must include a fast-start launch fund for 2010-2012 which is $10 billion (£6.1 billion) annually.... ... The joint statement by Mr Brown and Mr Sarkozy added: "We are determined that Copenhagen agrees to put in place stronger global environmental governance. There is much at stake at Copenhagen. We will be doing all in our power to reach the ambitious and comprehensive global agreement the world needs." http://www.timesonline.co.uk/tol/news/environment/article6953222.ece Been trying to bang the drum on Copenhagen but few are catching on
Copenhagen climate summit: Brown pledges £1.5bn global warming aid to poor countries The Prime Minister upped the British figure at the last minute from £1.2 billion to £1.5 billion - the largest national share - to encourage bigger offers, particularly from Spain and Italy. The final figure was above the target for agreement at the Copenhagen climate summit. France and Germany pledged around £1.2 billion each over three years. Asked why the British contribution was the biggest, Mr Brown said: ''I think we have done the right thing. This offer is one of the ways we can get a global agreement at Copenhagen.'' http://www.telegraph.co.uk/earth/co...5bn-global-warming-aid-to-poor-countries.html This nutcase is jeopardizing the UK's credit rating because he's not taking appropriate fiscal measures at home. Now here he is committing the UK to outrageous payments with Tobin Tax in his sights.
Merkel again today! However, she said after a European Union summit Friday that "I don't think we can introduce a bonus tax for this year" in Germany. She said that might raise "constitutional problems." She noted that bonuses are more of an issue in Britain than in Germany, and renewed a call for an international financial transaction tax. This thing is really picking up steam worldwide this week, this must have Pelosi licking her botoxed lips over revenue!! I hope she doesnt throw it in the bill jsut becuase it has picked up more steam.
The Euros love to talk, issue press releases, support each other and find EU consensus with endless trips and junkets to Brussels and other conferences. It's what they have been forced to do this past decade as the EU and Euro solidifies in its first few years (in terms of history). The EU is in high alarm over the budget deficits and corresponding banker profits. If they donât fix those country deficits, the Euro as a currency itself is in jeopardy, unless they waive their budget rules and that can cause further havoc. The EU is ramping up its rhetoric during their EU-hosted climate control conference. Remember, the EU got very frustrated when the US opted out of the Kyoto protocol last time around almost a decade ago. Itâs an EU power play to rein in the US and the IMF too, which they view as being too influenced by the US (with its headquarters in DC). They have cleverly tied these two issues together, a need for a global tax and using the financial-transaction tax to do it (paid by bankers, which we know wonât be the case anyway). Secretary Geithner should hold a steady course here while the Euros make a power play, and not give their snowball further momentum. Letâs see if Asian parties weigh in with support on this EU agenda, or Switzerland, Canada or Russia too. The main goal of the EU is to get the UK under its fold once and for all. The EU continental powers want the UK to join the Euro and cooperate more closely on EU consensus The UK has been playing both sides of the pond, with its special relationship with the US too. So this is really French President Sarkozy and German Chancellor Merkel supporting UK PM Brown and is Labor partyâs reelection in early 2010 as much as anything else. UK Tories would keep independence from the EU and not trash their Cityâs business. Donât let these bleeding hearts upset your heat with too much anxiety. We should still win this issue in my view. But if we donât, then we will find alternatives. If they give exemptions to professional market makers â which we all expect - then we will organize those types of entities for our traders, using proprietary trading firm models. Itâs fairly easy with low cost to form non-customer broker dealers with the Chicago exchanges. There will be holes in this tax dike and we will find them. Take heart but donât stop fighting!
You're right, there will be holes and we will be able to find them but trading will change immensely and what's the point of putting ourselves in a situation where we have to get creative and possibly pass up on opportunities because of this tax? Let's just keep fighting as hard as we can and make sure the tax never comes to fruition!
Gordon Brown says support is growing for a global tax on finance Gordon Brown said today that there's growing support for a tax on financial transactions to ensure banks shoulder the cost of any future crisis. The British prime minister, who on Wednesday introduced a one-time 50pc tax on bankers' bonuses, said that "global taxes will not be introduced unless all global financial centres are able to come behind them, but I believe there's global support for that." http://www.telegraph.co.uk/finance/...t-is-growing-for-a-global-tax-on-finance.html
Robert, can you please elaborate a little bit about how to form a non-customer broker dealers with the exchanges? I'd like to understand we can do to continue trading viably if the worst scenario happens. Your comments are much appreciated.