Conclusions:
The review finds that the proposed FTT is likely to have a significant and highly uncertain negative impact on the EU economyânot just for international financial centres such as London, but for all business and investors in the EU. The Commissionâs economic impact assessment already finds a significant negative impact, yet Oxeraâs review suggests that the negative economic impact is likely to be larger even than the Commission expects (or, alternatively, the revenue raised by the tax will be much lower). With the additional uncertainty of financial services relocation and capital flight outside of the EU, as well as âunintended consequencesâ, the overall likelihood of the proposed tax increasing total net tax revenues of EU governments is uncertain.
In this context, Oxera would suggest that the results of the Commissionâs economic impact assessment do not provide an appropriate degree of confidence on the potential economic impact and consequent net impact on tax revenues. A further examination of the potential economic impact would therefore be necessary before a well-informed decision could be made about the proposed FTT.
Quote from Rantany:
One of the best independent articles on FTT I've read so far. Extensive, well-argued, unbiased article, and much worth to read.
Fortunately it's in German, because especially all those stubborn German FTT proponents really should read this.
www.faz.net/aktuell/wirtschaft/finanztransaktionssteuer-die-robin-hood-steuer-11606838.html ('Frankfurter Allgemeine', a well known German newspaper)
Google translation of the last part:
Quote from tomdavis:
The mention of Professor Kenneth Rogoff in the above article caused me to search for the source.
It turned out to be a gold mine from a Harvard Economics Professor (and former Chief Economist for the IMF).
The following article by Ken Rogoff is one of the very best I have ever read about the FTT. It's well-written and addresses all the major arguments, both for and against. If you're looking for something to send to your congressional representative or Senator, this is it -- a complete FTT education in one article.
The Wrong Tax for Europe: http://www.project-syndicate.org/commentary/rogoff85/English
In anticipation of the possible introduction of a financial transaction tax from 2014 only in the euro-zone banks are already on a partial shift their activities to London or overseas. "All major commercial banks in Germany are already working on model calculations, as they optimize their equity, bond and derivatives trading so that the tax does not, or as little as possible," said one of major banks in several projects of involved consultants.
Quote from sculptor66:
According to an article today in Financial Times Deutschland, banks in Germany are already preparing for migration to UK or other countries:
http://www.ftd.de/unternehmen/finan...banken-schmieden-ausweichplaene/60154998.html
EUâs Financial Transaction Tax could increase FX costs by 9 to 18 times for Europeâs pension funds and businesses
To reach this increase of 18 times, the report used the example of the most liquid swap product â the EUR/USD 1 week swap with a notional value of â¬25,000,000, as transacted between a bank and a financial institution (e.g. pension fund). The current cost to transact for the end-user is â¬279. The additional taxation of this transaction at 0.01% is â¬2,500 to the dealer and an additional â¬2,500 to the financial institution, resulting in a total cost of â¬5,279 or an 18-fold increase, assuming all costs are passed onto users.
Quote from tomdavis:
If banks move their trading operations out of Germany, the exchanges can't be far behind.
Deutsche Börse already has locations in Switzerland, Luxembourg and the Czech Republic; and they have offices in Beijing, London, Chicago, New York, Hong Kong, and Dubai. It won't take long for them to migrate transactions out of Frankfurt.