Brussels, 21 January 2019 – Back in 2013, BETTER FINANCE clearly expressed its support for a European Financial Transaction Tax (FTT) and its main stated objective “[of ensuring] that financial institutions make a fair and substantial contribution to covering the costs of the recent crisis… and to ring-fence the real economy, SMEs, households, etc.”.
At the same time, BETTER FINANCE did voice major concerns with the proposal for an FTT tabled by the European Commission (EC) in February 2013, pointing to the fact that the proposal did not meet this objective, and that it would, once again, be EU citizens who would bear the bulk of this FTT in lieu of financial institutions.
Indeed, rather than targeting transactions between financial institutions, as per the commendable objective of the FTT, the current proposal once again targets EU Citizens as Savers and end-investors whilst the financial industry escapes scot-free.
A genuine FTT, serious about its intention of co-opting financial institutions in the protection of the real economy and EU Citizens, would need to tax forex transactions, especially forex derivatives, as well as other derivatives, rather than focusing on trades in listed equities and bonds.