transaction tax will come in Europe by the end of 2012...
article in german
http://www.deutsche-mittelstands-nachrichten.de/2012/01/34837/
article in german
http://www.deutsche-mittelstands-nachrichten.de/2012/01/34837/
Transaction tax in germany
- Thread starter TraDaToR
- Start date
Does anyone know what plans Eurex have?
If this is introduced they need to move out of Germany, or at least move the product trading out, so at least the traders outside Germany and France wont be hit by the tax.
If Eurex stay in Germany then everyone trading Eurex products gets hit with it.
The poor traders based in Germany will be screwed either way unless they move out too, so volumes will fall even if Eurex does move, but it is better than doing nothing at all and risking a foreign exchange that is not subject to the tax taking the liquidity.
The UK can stop it from going EU wide but they cant stop France and Germany or any other country from implementing the tax by themselves.
"French officials are in contact with Germany to produce a paper on a transaction tax before the Brussels summit with a view to proceeding without Britain and any other countries that refuse to take part"
http://www.ft.com/cms/s/0/4028c5d4-37ba-11e1-9fb0-00144feabdc0.html#axzz1ifQBOVc7
Apparently, the new franco german proposition will exactly target this kind of behaviour. They want to tax every "french" or "german" issued products, like bund or CAC40. So ultimately Eurex won't be able to move or CME won't be able to list a non taxed CAC40 futures. So the bund, bobl ... will just plain die. There will still some obscure government backed institutions that will trade on Eurex just for the sake of it and the politicians will take it as a victory, a real economy fueled exchange vs a speculative one, even if 9/10 th of the volume will be gone. Time to move to other products it seems...
Quote from TraDaToR:
Apparently, the new franco german proposition will exactly target this kind of behaviour. They want to tax every "french" or "german" issued products, like bund or CAC40. So ultimately Eurex won't be able to move or CME won't be able to list a non taxed CAC40 futures. So the bund, bobl ... will just plain die. There will still some obscure government backed institutions that will trade on Eurex just for the sake of it and the politicians will take it as a victory, a real economy fueled exchange vs a speculative one, even if 9/10 th of the volume will be gone. Time to move to other products it seems...
It's okay, Americans and American traders will be minimally impacted. Let the communist bureacrats do what they want in EuroLand.
Quote from TraDaToR:
Apparently, the new franco german proposition will exactly target this kind of behaviour. They want to tax every "french" or "german" issued products, like bund or CAC40. So ultimately Eurex won't be able to move or CME won't be able to list a non taxed CAC40 futures. So the bund, bobl ... will just plain die. There will still some obscure government backed institutions that will trade on Eurex just for the sake of it and the politicians will take it as a victory, a real economy fueled exchange vs a speculative one, even if 9/10 th of the volume will be gone. Time to move to other products it seems...
They cant stop derivatives from moving, as much as they would like to.
If anyone wants to set up a futures exchange in the say the USA or Asia to hedge the future price of german goverment bonds, the germans cant come in and tax you.
They can however hit germans who want to bet on your exchange but they cant hit you.
Share and cash Bonds might be another issue however as the German goverment can retain some control over these.
But i cant see how they can tax say Bund, Bolb Shatz futures trading else where in the world.
Quote from TraDaToR:
Apparently, the new franco german proposition will exactly target this kind of behaviour. They want to tax every "french" or "german" issued products, like bund or CAC40. So ultimately Eurex won't be able to move or CME won't be able to list a non taxed CAC40 futures. So the bund, bobl ... will just plain die. There will still some obscure government backed institutions that will trade on Eurex just for the sake of it and the politicians will take it as a victory, a real economy fueled exchange vs a speculative one, even if 9/10 th of the volume will be gone. Time to move to other products it seems...
That's exactly right.
However you have to wonder had the speculation not got totally out of hand through HFT/Algo trading would we be going down this road.