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Press Release: Ten EU countries agree on key elements of a transaction tax

Submitted by on December 8, 2015 – 5:18 pm
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Americans for Financial Reform welcomes the progress made in Europe today toward implementation of a financial transaction tax, a small levy on share and derivatives trades aimed at discouraging short-term speculation and generating revenue for urgent public needs.

Ten euro-zone countries, including Germany and France, outlined the key points of their broad consensus on a harmonized transaction tax, giving themselves until the middle of next year to reach agreement on remaining issues, including tax rates. The tax will cover share and derivatives transactions with an exemption for market-making activities in securities trading.

“We are happy to see Europe moving forward on this critical financial reform and urge U.S. policymakers to follow suit,” said Lisa Donner, Executive Director of Americans for Financial Reform. AFR is a broad coalition of labor, consumer, and other groups, which has benefited from the expertise of a growing number of financial industry professionals who support a financial transaction tax.

AFR helped organize a support letter signed by more than 60 individuals with significant experience in the financial industry. Financial transaction taxes, they wrote, “offer a real opportunity to help restore the financial sector to its proper role, while raising massive revenues for people in urgent need at home and in the world’s poorest countries.”

A number of these experts are available for interviews. In this commentary in Fortune, Douglas Cliggott, a lecturer in economics at the University of Massachusetts Amherst and former managing director and U.S. equity strategist at JP Morgan Chase, wrote: “Taxing stock market transactions – intentionally adding meaningful friction to the market – can reduce wasteful trading and improve our financial well-being.”

In response to the EU agreement, Avinash Persaud, a former senior executive of JP Morgan, UBS, and State Street, and currently a non-executive Chairman of Elara Capital PLC, said that “getting so many countries to agree to an international financial tax is no mean accomplishment. This illustrates the importance of reducing the systemic risk caused by excessive churning of portfolios and ensuring the financial sector contributes to the costs of financial crises.”

John Fullerton, a former JP Morgan Managing Director and now the founder of the Capital Institute, wrote in The Guardian that such a tax is “a proven revenue raiser and a laser-sharp policy intervention that helps combat the negative effect on the wider economy by a financial sector ridden by corrosive speculation.”

 

For media requests, contact: Jim Lardner 202-466-1854 / jim@ourfinancialsecurity.org

 

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