1/4% Tax on all stock trades pushed in NY Times today

Joseph Stiglitz calls for Tobin tax on all financial trading transactions


Although economist James Tobin said his idea of a small tax on every foreign exchange transaction, in order to reduce financial sector volatility, was unfeasible in practice, Professor Stiglitz said modern technology meant that was no longer the case.

His comments may force experts to reconsider their assumptions that a charge on the international financial sector, something proposed by G20 ministers last month, is unlikely ever to materialise.

http://www.telegraph.co.uk/finance/...ax-on-all-financial-trading-transactions.html
 
Prof Stiglitz, in Istanbul for talks on the fringes of the International Monetary Fund and World Bank meetings, said the tax is “much more feasible today” than a few decades ago, when Tobin recanted


Thats says it all above:) He was on the fringes. The people at the real meeting in Turkey do not want him there!
 
For those of you in the US. We all know the imf was tasked with finding a way for money from the bankers. This weekend shed some light on it with the IMF opposing transaction taxes but said a type of FDIC like insurance could be possible, that is fine. Make sense. Whether they get it done and then get it approved by all countries is another matter. Here is what Alistar Darling from London had to say, by the way Darling is opposed to transaction taxes but would welcome the above FDIC type model, this is what he says about the US agreeing to anything:

The main problem was in getting all countries to agree a common proposal, and Mr Darling pointed out that the US, which has a blocking majority in the IMF, was implacably opposed to such a plan.
 
Quote from rsikit:

For those of you in the US. We all know the imf was tasked with finding a way for money from the bankers. This weekend shed some light on it with the IMF opposing transaction taxes but said a type of FDIC like insurance could be possible, that is fine. Make sense. Whether they get it done and then get it approved by all countries is another matter. Here is what Alistar Darling from London had to say, by the way Darling is opposed to transaction taxes but would welcome the above FDIC type model, this is what he says about the US agreeing to anything:

The main problem was in getting all countries to agree a common proposal, and Mr Darling pointed out that the US, which has a blocking majority in the IMF, was implacably opposed to such a plan.
More...

But FDIC insurance protects client assets, not the banks. I don't believe there exists a type of insurance that can protect a business from bankruptcy.
 
Probably not but they are looking into it as merely a FDIC type fund that they get from the banks in case another crisis happens, which they can then either use that money for purposes of a bailout rather then the taxpayer money or use it for less developed countries that will be hurt by a crisis. Thats what the IMF has stated but we shall see next June what they come up with
 
Quote from rsikit:

Probably not but they are looking into it as merely a FDIC type fund that they get from the banks in case another crisis happens, which they can then either use that money for purposes of a bailout rather then the taxpayer money or use it for less developed countries that will be hurt by a crisis. Thats what the IMF has stated but we shall see next June what they come up with
More...

For purposes of a bailout means 'saving the banks from bankruptcy' in my book. I don't think it's possible to calculate upfront what's the risk of failure ( crisis) . What I mean is that insurance might not always be enough to bailout all the banks that would need it at the time of crisis. ( Since the capital infusion required at the time of crisis is unknown variable). If it was possible to calculate correctly the risk before the crisis then there would be no crisis and no need for the insurance.
 
Here are a couple of reads:

From Allistair Darling:

Asked about the possibility of implementing a so-called Tobin tax on financial transactions, Mr. Darling said that a lot of work still needed to be done on how to discourage speculative behavior and to decide how financial institutions could make a bigger contribution, given their greater reliance on the public purse.

"If we did go down this route [of the Tobin tax], it would have to be clearly workable. Technically feasible but also workable in practical terms. But it would also have to be global. You couldn't do this in one country or one group of countries," Mr. Darling stressed.

"I think we're some way off actually being able to see a proposition which you could say yes or no to."


http://online.wsj.com/article/SB125461198841562107.html
 
Paul Tucker (Deputy Gov of the Bank of England) raises prospect of tax on banks for future rescues...

http://business.timesonline.co.uk/t...ctors/banking_and_finance/article6861036.ece#

This doesn't mention a tobin tax per say just a bank levy to be paid by the 'surviving' banks after the next crisis. Does anyone have any more color on this proposal? Does this Tucker guy have any pull?

It still sounds to me like the IMF is leaning towards recommending an FDIC type insurance plan to protect against future bailouts. I don't think Joseph Stiglitz calling for a Tobin type tax has much pull on the IMF (but I've been wrong before, lol)..

-Guru
 
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