Quote from listedguru:poorer countries, which need capital flows to balance their account." [/B]
If the alternative considered by the IMF is insurance paid directly by the insured (i.e. mostly Western banks), countries without internationally significant banking sectors such as China or India would oppose any tax designed to inhibit capital flows (transactions mean not only outflows, but also inflows).
Let's hope other developing countries join in and point out they should not be bearing the cost of insuring Western banking sectors against systemic risk. How fair would that be if the IMF collected a tax on trading of emerging markets ETFs just to pay it out later when the next overleveraged US bank blows up. Of course a performance bond ('margin') cannot replace insurance paid over longer time, because banks positions are too big and too illiquid for margin call liquidations... so the protection must come from long term 'emergency' funds.
The IMF is definitely the oracle to watch, because it is the insurance against systemic risk in the banking industry that may eventually bring 'it' on, not global warming. With respect to global warming, carbon credits markets have been again re-confirmed as the most important funding source - in Monday's Today programme, where 'our man' at the BBC, Evan Davis, interviewed the managing director of the European Climate Exchange (
http://www.ecx.eu), who claimed that by 2020, the carbon futures market will have larger volumes than crude oil today.
So here we have at least one liquid market, which the IMF could not humanely try to tax without a huge outcry from the developing countries ('Solomon Islands drowned to bail out Wall Street banks'
. Conflicting interests between the environmental funding requirements (market-funded) and banking sector systemic risk insurance via a Tobin tax (market-stifling) are sufficient to make the Tobin tax unworkable, because if one liquid international market is exempt... then here we go: even without India's dissent, another weak link in the chain is there, enough to make Mr Tobin turn in his grave.
Traders are good for the economy, Mr DeFazio, so stop fighting them now or else you will make CO2 polluters grin with glee... again, like that Thursday's selloff in the carbon markets presented to them by the bickering politicians in Copenhagen
