Should banks be commissioned to begin their own financial recovery via their own pockets?
I felt the need to dedicate one of our blogs to the ‘financial transactions tax’ (FTT). Although there are influential supporters of the tax such as Bill Gates, Bill Nighy and Oxfam there are also a fair few individuals opposed to the tax and quite frankly I feel somewhat indifferent about it.
Yes we all had that pang of bitterness when the banks caused our initial recession in 2008 – let alone having suffered through the difficult period that followed and the bleak financial future we are heading towards, due to the global financial crisis, and therefore I do believe banks should be commissioned to begin their own recovery via their own pockets. With the latest European plan being that from January 2014 securities transactions, involving an EU-based financial institution, would be taxed at 0.1 per cent and all OTC derivatives deals at 0.01 per cent – for that minimal percentage to raise a potential £20bn – great if it will but I can’t help think, are they over estimating the success of this new tax?
On the other hand if you look back to the 1990s when Sweden imposed a Robin Hood Tax of 0.003% on bond transactions it caused a catastrophic effect on the Swedish economy. The question is – are we basing this tax on hope and ignoring the potential disasters on the economy?
With a divide in politics about this tax – they are situated in a tug of war situation – I find myself placed in the middle. But if introducing this tax the government will simultaneously reduce other taxes to stimulate the economy then I am won over and it is worth taking the risk