Quote from listedguru: especially when the IMF comes out with it's report not in favor of the Tobin tax).
..which is rather likely, given that the Managing Director of the IMF, Dominique Strauss-Kahn, has just "welcomed a proposal by U.S. President Barack Obama that major U.S. financial firms pay a fee to help the government recover losses from the financial crisis, saying this showed that the worldâs biggest economy was prepared to follow up although the crisis was receding, adding that "Regulation and financial sector supervision needed to be not just stronger but smarter. The aim was
not to impose additional layers of regulation." (
http://www.imf.org/external/pubs/ft/survey/so/2010/NEW011410A.htm ) and especially given the views expressed by Strauss-Kahn's deputy, John Lipsky (who leads the group preparing the report for G20 on how to pay for financial sector rescues), in his January 11th interview for the IMF Survey online:.
"eventual policy decisions in this area will involve judgments about fairness and
efficiencyâissues that inherently are difficult and often contentious."
"before we look to use the tax system to fund crisis resolution, we need to ask whether
current tax rules favor excessive risk-taking, and if so, how such problems could be corrected."
"Of course we will examine all worthwhile proposals. However, the original âTobin taxâ proposalâfirst suggested by the late Nobel laureate James Tobinâwas limited to foreign exchange transactions, and was intended to reduce the volume of such transactions, not to raise revenue. [..] Whatever the merits of this approach, and the worthiness of the overall goal, this is
not exactly the issue that the G-20 Leaders asked us to analyze."
Source: "IMF Studies How to Pay for Financial Sector Rescues", IMF Survey online, January 11, 2010, URL:
http://www.imf.org/external/pubs/ft/survey/so/2010/INT011110A.htm
Note also that the Obama bank tax seems to have satisfied the blood-thirsty public. While there are still some serious voices claiming that it is not enough (such as former IMF's chief economist, Simon Johnson here:
http://baselinescenario.com/2010/01/14/the-obama-financial-tax-is-a-start-not-the-end/ ), the additional measures proposed here are more regulation, not more taxation (we know already from this January 6th BBC interview that prof. Johnson does not recommend the Tobin tax, see
http://www.elitetrader.com/vb/showthread.php?s=&postid=2691614&highlight=simon+johnson#post2691614 and PM me or Explorer for the entire interview in mp3 format - guess what happened after we posted in on the
http://houndbite.com website... but that's merely post hoc ergo propter hoc, unless you are even more paranoid than myself
.
The general public appetite for revenge seems to be subsiding thanks to the well-timed pre-bonus Obama tax proposal. Now only the most radicalized minority of 2% or so is calling for Tobin tax on top of Obama tax (judging from the proportion of posters mentioning this trans-tax in a sample of BBC listeners commenting on the question 'Will Obama's tax go global?' posed by the BBC's business editor on his blog here:
http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/01/will_obamas_tax_go_global.html )
Some interesting readers opinions from these two blogs:
"I think broadening the net to $50 billion in assets down from $100 billion makes it more likely this will stall in the Senate. The $50 to $100 billion banks pose no systemic risk. Perhaps some White House staffers are thinking about their careers at GS⦠Todayâs proposal is a disappointment compared to what was floated earlier. (Linus Wilson, who's impeccable academic... timing can be admired at
http://www.tarpwarrants.com
... and from Ian Hosier, a seasoned banking sector worker, who just points out the sheer redundancy of the Obama bank tax (which is good since it placates the pubic hunger - sorry, genuinely Freudian, so I'm leaving it
:
"(ii) the US banks already fund every cent spent by the FDIC when it is protecting the depositors at failed banks. Last year, the banks not only paid the 'regular' levy to the FDIC, they also paid a once-off additional levy for 2009, as well as a large accelerated payment of the projected FDIC levy for the next 3 years.
If all of those prove insufficient, then they will have to pay yet further levies, so that the FDIC is kept sufficiently in funds to cover depositor losses.
Although there is Federal credit line to back-stop any temporary shortfall of funds at the FDIC, it has never been used, and - if it ever were used - then the banks would have to pony-up another levy to repay the Fed's credit line.
So, the US banking system routinely pays all necessary amounts to protect all depositors at the FDIC-guaranteed banks - a fact usually completely ignored when people are bashing the banks, as Robert [Peston] was in [..]his blog."
