1/4% Tax on all stock trades pushed in NY Times today
- Thread starter seasideheights
- Start date
âTobin taxâ would cause radical remodelling of UK fund industry
http://www.investmentweek.co.uk/inv...ax-cause-radical-remodelling-uk-fund-industry - see you have this link above too, thanks.
I've been reading articles on how money market funds can't operate with a FTT. They buy and sell daily, think overnight repos, and turnover is much higher than with investment funds.
Talk about "breaking the buck." If money market accounts aren't feasible, who will buy Europe's commercial paper?
U.S. money market funds already have shunned EU bank commercial paper and imagine the financial-market panic when money market funds can't operate in Europe.
German and French FTT medicine will surely kill the patient. It's hard to believe that they are still pushing this very ill-conceived and poorly-thought out idea.
no wonder Germany doesn't give a damn about UK as financial center.
ost of 2,000 jobs. It plans to exit asset securitization, complex structured products, macro- directional trading and equity proprietary trading. The investment bankâs European headquarters is in London and it employs about 7,000 people in the U.K.
Smaller Stockbrokers
In the first quarter of last year, bank executives were planning to cut costs by 10 percent to 15 percent to boost return on equity targets, Ernst & Youngâs Baggs said. Now theyâre targeting 40 percent cost reductions, he said.
Clientsâ aversion to risk amid the turmoil in Europe is also squeezing equity trading desks and smaller stockbrokers in particular. Average trading volumes on the London Stock Exchange has remained below pre-crisis levels, according to data compiled by Bloomberg.
Morgan Stanleyâs heads of European credit sales and trading, emerging market fixed-income sales and trading departed as well as two managing directors at its equities unit in London. Nomura Holdings Inc. (8604) is also scaling back its European expansion that began after the purchase of Lehman Brothers Holdings Inc. (LEH)âs European and Asian units in 2008.
Stockbrokers Evolution Group Plc (EVG), Merchant Securities Group Plc, Arbuthnot Securities Ltd. and Collins Stewart Hawkpoint Plc (CSHP) have all accepted takeover offers from larger competitors since the end of October.
Economic Forecasts Reduced
âFor firms that have revenue falling off a cliff with a large cost base, the future is very bleak,â said Jamie Moyes, who worked in sales trading at London-based brokerage Liberum Capital Ltd. until September. âThe events of the market place are horrendous.â Moyes plans to help set up a stockbroking firm, starting with about six partners.
Aside from trading, equity capital markets and merger and acquisition advisory teams are also being slimmed down as a result of lower demand from corporate clients because of the European sovereign-debt crisis and worsening economic outlook.
The euro-region economy may expand 0.3 percent in 2012 instead of a previously forecast 1.3 percent, the European Central Bank said on Dec. 8. Some forecasters, including Morgan Stanley, project the region will shrink this year.
Firms in the U.K. raised 9.7 billion euros ($12.4 billion) through share sales last year compared with 24.9 billion euros in 2010 and 71.4 billion euros in 2009, according to data compiled by Bloomberg.
Bonuses Decline
The reduced corporate activity is affecting pay. Bonuses paid to the average London financial services worker for 2011 may shrink by about a fifth to 19,920 pounds, or 24 percent of their base salary, according to a survey by recruitment firm Astbury Marsden.
While Londonâs banks have survived declines before, their profitability is under a fresh attack from international regulators. The European Commission, which drafts legislation for the European Union, has proposed a transaction tax of 0.1 percent on trading of stocks and bonds, and a 0.01 percent rate for derivatives contracts.
U.K. Chancellor of the Exchequer George Osborne called the tax âa bullet aimed at the heart of Londonâ and estimates as much as 80 percent of the revenue raised will come from U.K. firms. French President Nicolas Sarkozy said last week heâs willing to impose the levy unilaterally in an effort to spur other countries to join.
Transaction Tax
The European Commission estimates the tax on its own could raise 57 billion euros a year. Thatâs optimistic because it excludes the impact of lower capital-gains tax revenue and gross domestic product, a study by Ernst & Young said this month.
The tax will increase transaction costs in the foreign- exchange market by three to seven times and by as much as 18 times for the most traded parts of the market, a study by Oliver Wyman commissioned by the Global Financial Markets Association said today.
U.K. Prime Minister David Cameron insists Britain can veto the EU tax, meaning countries within the 17-nation euro area may need to introduce the levy on their own. That may still put pressure on Britain should euro-region countries impose the tax on euro-denominated products.
Cameronâs government last year accepted proposals from the Independent Commission on Banking to force banks to insulate their consumer banking units while increasing capital requirements. Those recommendations will cost banks as much as 7 billion pounds annually to implement, the panel said.
Barclays, HSBC
Among the U.K. banks, the proposals will affect lenders with investment banking divisions the most and Lloyds Banking Group Plc (LLOY) the least because it is mainly a retail bank, according to analysts at HSBC Global Research on Jan. 10. HSBC, RBS and Barclays Plc (BARC) all have investment banks.
Londonâs decline puts its status as the worldâs premier financial center under threat from New York and Hong Kong, which are catching up, according to a survey of 1,887 executives by financial-services research firm Z/Yen, published in September. The survey asked about issues such as regulation, tax and lifestyle.
âLondon may not always be number one in the world, but it will still be a strong financial center,â said Mark Yeandle, Z/Yenâs associate director in London. âItâs not going to fall out of the top five anytime soon.â
Londonâs Advantages ... cont.
http://www.bloomberg.com/news/print...s-shrink-in-the-city-as-europe-takes-aim.html
ost of 2,000 jobs. It plans to exit asset securitization, complex structured products, macro- directional trading and equity proprietary trading. The investment bankâs European headquarters is in London and it employs about 7,000 people in the U.K.
Smaller Stockbrokers
In the first quarter of last year, bank executives were planning to cut costs by 10 percent to 15 percent to boost return on equity targets, Ernst & Youngâs Baggs said. Now theyâre targeting 40 percent cost reductions, he said.
Clientsâ aversion to risk amid the turmoil in Europe is also squeezing equity trading desks and smaller stockbrokers in particular. Average trading volumes on the London Stock Exchange has remained below pre-crisis levels, according to data compiled by Bloomberg.
Morgan Stanleyâs heads of European credit sales and trading, emerging market fixed-income sales and trading departed as well as two managing directors at its equities unit in London. Nomura Holdings Inc. (8604) is also scaling back its European expansion that began after the purchase of Lehman Brothers Holdings Inc. (LEH)âs European and Asian units in 2008.
Stockbrokers Evolution Group Plc (EVG), Merchant Securities Group Plc, Arbuthnot Securities Ltd. and Collins Stewart Hawkpoint Plc (CSHP) have all accepted takeover offers from larger competitors since the end of October.
Economic Forecasts Reduced
âFor firms that have revenue falling off a cliff with a large cost base, the future is very bleak,â said Jamie Moyes, who worked in sales trading at London-based brokerage Liberum Capital Ltd. until September. âThe events of the market place are horrendous.â Moyes plans to help set up a stockbroking firm, starting with about six partners.
Aside from trading, equity capital markets and merger and acquisition advisory teams are also being slimmed down as a result of lower demand from corporate clients because of the European sovereign-debt crisis and worsening economic outlook.
The euro-region economy may expand 0.3 percent in 2012 instead of a previously forecast 1.3 percent, the European Central Bank said on Dec. 8. Some forecasters, including Morgan Stanley, project the region will shrink this year.
Firms in the U.K. raised 9.7 billion euros ($12.4 billion) through share sales last year compared with 24.9 billion euros in 2010 and 71.4 billion euros in 2009, according to data compiled by Bloomberg.
Bonuses Decline
The reduced corporate activity is affecting pay. Bonuses paid to the average London financial services worker for 2011 may shrink by about a fifth to 19,920 pounds, or 24 percent of their base salary, according to a survey by recruitment firm Astbury Marsden.
While Londonâs banks have survived declines before, their profitability is under a fresh attack from international regulators. The European Commission, which drafts legislation for the European Union, has proposed a transaction tax of 0.1 percent on trading of stocks and bonds, and a 0.01 percent rate for derivatives contracts.
U.K. Chancellor of the Exchequer George Osborne called the tax âa bullet aimed at the heart of Londonâ and estimates as much as 80 percent of the revenue raised will come from U.K. firms. French President Nicolas Sarkozy said last week heâs willing to impose the levy unilaterally in an effort to spur other countries to join.
Transaction Tax
The European Commission estimates the tax on its own could raise 57 billion euros a year. Thatâs optimistic because it excludes the impact of lower capital-gains tax revenue and gross domestic product, a study by Ernst & Young said this month.
The tax will increase transaction costs in the foreign- exchange market by three to seven times and by as much as 18 times for the most traded parts of the market, a study by Oliver Wyman commissioned by the Global Financial Markets Association said today.
U.K. Prime Minister David Cameron insists Britain can veto the EU tax, meaning countries within the 17-nation euro area may need to introduce the levy on their own. That may still put pressure on Britain should euro-region countries impose the tax on euro-denominated products.
Cameronâs government last year accepted proposals from the Independent Commission on Banking to force banks to insulate their consumer banking units while increasing capital requirements. Those recommendations will cost banks as much as 7 billion pounds annually to implement, the panel said.
Barclays, HSBC
Among the U.K. banks, the proposals will affect lenders with investment banking divisions the most and Lloyds Banking Group Plc (LLOY) the least because it is mainly a retail bank, according to analysts at HSBC Global Research on Jan. 10. HSBC, RBS and Barclays Plc (BARC) all have investment banks.
Londonâs decline puts its status as the worldâs premier financial center under threat from New York and Hong Kong, which are catching up, according to a survey of 1,887 executives by financial-services research firm Z/Yen, published in September. The survey asked about issues such as regulation, tax and lifestyle.
âLondon may not always be number one in the world, but it will still be a strong financial center,â said Mark Yeandle, Z/Yenâs associate director in London. âItâs not going to fall out of the top five anytime soon.â
Londonâs Advantages ... cont.
http://www.bloomberg.com/news/print...s-shrink-in-the-city-as-europe-takes-aim.html
Trade body warns of â¬300bln Tobin tax cost
"AIMA, which represents the hedge funds industry, said that the tax was actually liable to cost more than even the nearly â¬300bn cost implied by the Commissionâs estimate, due to the âcascade effectâ it would create, with the FTT set to be applied every time a stock, bond or derivative was purchased or sold."
http://www.efinancialnews.com/story...bill-for-tobin-tax?mod=sectionheadlines-PE-AM
"AIMA, which represents the hedge funds industry, said that the tax was actually liable to cost more than even the nearly â¬300bn cost implied by the Commissionâs estimate, due to the âcascade effectâ it would create, with the FTT set to be applied every time a stock, bond or derivative was purchased or sold."
http://www.efinancialnews.com/story...bill-for-tobin-tax?mod=sectionheadlines-PE-AM
Merkel's party expects FDP to relent on transaction tax - Finance News - London South East
http://www.lse.co.uk/FinanceNews.as...arty_expects_FDP_to_relent_on_transaction_tax
Full-court press against FDP to concede FTT. Calling them an insignificant 2% party with no right to block the German freight train is not fair.
http://www.lse.co.uk/FinanceNews.as...arty_expects_FDP_to_relent_on_transaction_tax
Full-court press against FDP to concede FTT. Calling them an insignificant 2% party with no right to block the German freight train is not fair.
The FDP experiences pressure from all sides (german) now, but so far they still don't bend:
Brüderle: FDP rejects tax on financial transactions without Britain
But this quote from your article worries me a little:
Ok, it's from a leftist chairman, but could this mean that the 'only if EU wide' statement of Monti is not very strong? Without Italy, in Eurozone it only leaves Ireland, Malta and Cyprus as firm opponents (i'm still not sure about The Netherlands, Dutch PM is painfully quiet). If the others are pushing so hard to succeed, i'm not sure if these three little countries would be able to stop this madness. Maybe the other countries are crazy enough to go it alone even without these three (already without UK, would these three make the difference)?
The full AIMA report on FTT is available for download at the link below:
http://www.aima.org/download.cfm/docid/0C29CD99-353F-403B-B9D4DB267A42838F
It's a very comprehensive report, with many illustrations, e.g. on the cascade effect, and the residency principle. Recommended to read
