Thursday, 29 September 2011

FTT - Financial Transactions Tax.

Tobin's tax was designed to reduce volatility in the fx market.

Its also been suggested that the FTT, which would be a 10bps tax on stock, bond and derivative trades would be a good way to raise revenue.

Several commentators who really SHOULD know better, cite stamp duty in the UK as being a model.

Perhaps they'd care to look at the thriving CFD market, and the amount raised from retail investors and compare that to institutional investors? and reappraise their view! The tax simply does not work within the UK.

As to whether it reduces speculation? or volatility? well lets just say that if you think 10bps is going to stop somebody buying into a bubble or selling into a panic, well you need your head examined.

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