Over 50 leading financiers have expressed their support for a European Financial Transaction Tax (FTT) ahead of a meeting of Finance Ministers in Brussels next week. In an open letter to European leaders, the financiers argue the FTT will reduce financial instability and raise significant additional government revenue.
Finance Ministers from ten European countries including France, Germany, Italy, Belgium, and Spain, are expected to discuss the FTT at a meeting in Brussels on Monday 10 July. They are nearing agreement on the FTT after years of negotiations.
52 senior figures in the global finance industry signed the letter including Lord Adair Turner, Former Chairman of the UK Financial Services Authority (UK); Avinash Persaud, Chairman, Intelligence Capital Limited and former head of Currency and Commodity Research, JP Morgan (UK); Dr William Barclay, former Senior Vice President, Planning and Development, Chicago Stock Exchange (US); Luc Bomans, former Executive Vice President, JP Morgan, and former CEO, Euroclear Securities Clearing System (Belgium); Dirk Müller, Financial Expert and Former Broker, Frankfurt (Germany); Gunther Capelle-Blancard, Member of French Financial Market Authority Scientific Advisory Board; Luca Mattiazzi, General Manager, Etica Sgr (Italy); and Andrew Sheng, Former Chairman, Securities and Futures Commission (Hong Kong).
Their letter calls for a modest tax on financial transactions, such as the purchase and sale of stocks and derivatives. The financiers argue the tax will help deter the sort of high-risk ultra-short term trades that led to the 2008 financial crash. They highlight that the ‘Robin Hood’ tax would raise significant new revenues, that could be used to invest in healthcare and education across Europe, as well as the fight against poverty and climate change around the world. It is estimated that the European FTT could raise €22 billion a year – more than the European Union spends supporting agriculture in France, Germany and Italy combined.
The letter cites a growing body of evidence that the FTT could boost economic growth and dismisses claims that the tax will make it harder for European countries to entice finance firms away from London following Brexit.
Avinash Persaud, Chairman, Intelligence Capital Limited and former head of Currency and Commodity Research, JP Morgan (UK), a signatory to the letter, said: “The financial industry’s arguments against a Financial Transaction Tax don’t stack up. The FTT won’t harm investment or economic growth – but it will reduce the kind of dangerous trading behaviour that caused the financial crisis of 2008.”
Max Lawson, head of policy on inequality for Oxfam and a spokesperson for the European Robin Hood Tax coalition, which coordinated the letter, said: “The message from Europe’s top financiers is clear – a financial transaction tax makes economic sense and should be delivered without delay.”
“Finance Ministers must set out a timetable for reaching a deal by the end of July. Every day of delay deprives Europe’s citizens of €60 million in lost revenues. There are no technical issues standing in the way of agreement – it is simply a matter of political will,” added Lawson.
The Robin Hood tax enjoys widespread support across Europe: 73 percent of people polled in France, and 61 percent in both Belgium and Slovenia support the tax. However, the financial industry has been furiously lobbying for governments to drop the initiative. A final decision on the tax has been postponed twice. Since the last time, a final agreement was put off in December 2016, €12 billion could have been raised to benefit people at home and abroad.
Several countries including the UK, South Africa, Hong Kong, Singapore, Switzerland and India have already implemented financial transaction taxes that raise billions of dollars in revenues every year.
Notes to editors
Ten European countries are negotiating the European Financial Transaction Tax including Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia, and Spain.
The European Commission estimates the FTT will raise €22 billion per year
In 2015 EU agriculture spending was €9.03 billion in France, €5.47 billion in Italy, and €6.04 billion in Germany
Opinion polls were conducted in France, Belgium and Slovenia in August 2016 by the online market research company, Research Now. Of the 1030 people polled in France 71 percent of people agreed or strongly agreed that financial speculation must be limited through a tax on financial transactions and 73 percent of people said that France should contribute constructively to the FTT negotiations to ensure they succeed. 61 percent of the 1000 people polled in Belgium and Slovenia agreed or strongly agreed that their country should implement the FTT with other European partners.
The European Robin Hood Tax coalition is an alliance of trade unions, faith groups, development and environmental organisations and domestic charities from across Europe.
LETTER FROM FINANCIAL INDUSTRY PROFESSIONALS TO LEADERS OF THE 10 EUROPEAN COUNTRIES WORKING TO INTRODUCE FINANCIAL TRANSACTION TAX
Chancellor Christian Kern, AUSTRIA
Prime Minister Charles Michel, BELGIUM
President Macron, FRANCE
Chancellor Angela Merkel, GERMANY
Prime Minister Alexis Tsipras, GREECE
Prime Minister Paolo Gentiloni, ITALY
Prime Minister António Costa, PORTUGAL
Prime Minister Robert Fico, SLOVAKIA
President of the Government Miro Cerar, SLOVENIA
Prime Minister Mariano Rajoy, SPAIN
Dear European leaders,
As individuals with first-hand knowledge and significant experience in the financial industry, we urge you to introduce small financial transaction taxes (FTTs). These taxes will rebalance financial markets away from a short-term trading mentality that has contributed to instability in our financial markets. They also have the potential to raise significant revenue.
In the last few decades, financial market activity has increased tremendously, with the value of transactions now 70 times greater than the size of the real global economy. The primary role of financial markets is to raise investment, allocate resources efficiently, and mitigate risk. However, much of today’s financial activity does not contribute to these goals. Computer-driven, high frequency trading, for example, allocates resources on the basis of algorithms designed to turn very short-term profits and have been shown to drain liquidity in stressed markets when it is needed most. FTTs of a small fraction of a percent on each trade would moderate the incentives for such short-term speculation while having a negligible impact on long-term investment.
Concerns have been raised that FTTs could damage growth. But a growing body of evidence suggests that by reducing volatility, adding long-term liquidity, and raising much needed revenue, the overall effect would be significantly positive. Critics have also wrongly claimed that the exit of the UK from the EU is reason to delay or suspend FTT talks to entice London finance firms to move to mainland Europe. As industry professionals, we can assure you that these firms would base a decision on whether or not to relocate on many factors beyond a small transaction tax, especially given the fact that the UK already applies a tax on stock trades.
FTTs have a proven track record. Numerous countries, including those with deep and fast-growing markets, such as the UK, South Africa, Hong Kong, Singapore, Switzerland, and India, currently have FTTs on particular asset classes that raise billions of dollars per year. Additional FTTs, such as those your 10 countries are currently working to introduce, offer a real opportunity to help restore the financial sector to its proper role, while raising substantial revenues for people in urgent need at home and in the world’s poorest countries.
We urge you, for the reasons of stability, resilience and revenue outlined above, to do all in your power to finalise FTT negotiations so that implementation may happen at the earliest time. We believe this is an opportunity that should not be missed.
Yours faithfully,
Dr. Wilfried Stadler, former CEO, Investkredit Bank (Austria)
Benoît Lallemand, former Senior Internal Consultant and Service Excellence Manager, Euroclear Bank SA (Belgium)
Luc Bomans, former Executive Vice President, JP Morgan, and former CEO, Euroclear Securities Clearing System (Belgium)
Marc Bellis, former CEO of Corporate, Institutional and Public Banking Fortis (Belgium)
Robert Thys, former Director of International Affairs, NYSE Euronext Paris (Belgium)
Bernard Bayot, President, NewB; Director, Réseau Financité and Former President, European Financial Inclusion Network (EFIN) (Belgium)
Prof. Eric De Keuleneer, Professor of Finance, Université Libre de Bruxelles and CEO of Credibe (former Office Central de Crédit Hypothécaire) (Belgium)
Lars Pehrson, Managing Director, Merkur Andelskasse (Merkur Cooperative Bank) (Denmark)
Jean-Louis Bancel, President, Crédit Coopératif (France)
Rainer Geiger, former Deputy Director, Financial and Enterprise Affairs, OECD (France)
Stéphane Voisin, Financial Analyst (France)
Gunther Capelle-Blancard, Member of French Financial Market Authority (AMF) Scientific Advisory Board, Professor at the University Paris 1 Pantheon – Sorbonne, Deputy Dean of the Sorbonne School of Economics (France)
Bernd Kloth, Board Member, Pax-Bank eG (Germany)
Dirk Müller, Financial Expert and Former Broker, Frankfurt (Germany)
Dr. Klaus Schraudner, Chairman of the Board, Pax-Bank eG (Germany)
Klaus Euler, Chairman of the Board, Ethik bank (Germany)
Matthias Lehnert, Managing Director, Oikocredit (Germany)
Prof. Dr. Max Otte, Investment Fund Manager, Economist (Germany)
Richard Boeger, Managing Director, Bank für Kirche und Caritas eG (Germany)
Thomas Jorberg, Executive Board Spokesman, GLS Gemeinschaftsbank eG (Germany)
Prof. Dr. Rainer Lenz, Professor of Finance at the University of Applied Sciences, Bielefeld (Germany)
Andrea Baranes, President, Ethical Finance Foundation (Italy)
Luca Mattiazzi, General Manager, Etica Sgr (Italy)
Ugo Biggeri, President, Banca Popolare Etica (Italy)
Giulio Romani, Secretary General, FIRST CISL, (Italy)
Agostino Megale, Secretary General, FISAC-CGIL (Italy)
Massimo Masi, Secretary General, UILCA (Italy)
Prof. Dr. Marc Chesney, Professor of Finance, University of Zurich (Switzerland)
Lord Adair Turner, former Chairman of the UK Financial Services Authority (UK)
Alastair Constance, Managing Director, Ethical Currency Limited (UK)
Avinash Persaud, Chairman, Intelligence Capital Limited & Chairman, Elara Capital PLC, and former head of Currency and Commodity Research, JP Morgan (UK)
Dr. Paul Wilmott, Proprietor, Wilmott magazine and the quantitative finance portal wilmott.com, and Former Partner, Caissa Capital (UK)
Prof. Stephany Griffith-Jones, Financial Markets Program Director at the Initiative for Policy Dialogue, Columbia University, and former Head of the Department of Credit for the Public Sector at the Central Bank of Chile and Latin American analyst, Barclays Bank (UK)
Raj Thamotheram, Founder and Co-Chair, Preventable Surprises, former President, Network for Sustainable Financial Markets, and former Director of Responsible Investment, AXA Investment Managers (UK)
Rev. Iain May, BSc MBA BD, former Senior Manager RBS and Head of Planning Strategy, AIB Bank, current Chair, Castle Community Bank (UK)
Sony Kapoor, Managing Director, Re-Define, Visiting Scholar, the IMF, and former derivatives trader (UK)
Andrew Sheng, former Chairman, Securities and Futures Commission (Hong Kong)
Rob Johnson, President, Institute for New Economic Thinking, Senior Fellow at the Roosevelt Institute, former Managing Director at Soros Fund Management and former Chief Economist of the US Senate Banking Committee (US)
Amy Domini, Trustee, The Sustainability Group of Loring, Wolcott & Coolidge (US)
Doug Cliggott, Lecturer, University of Massachusetts-Amherst, and former Managing Director and U.S. Equity Strategist, JP Morgan (US)
Dr. Hazel Henderson, President, Ethical Markets Media, and former Advisory Council member, Calvert Social Investment Fund (US)
Dr. William Barclay, former Senior Vice President, Planning and Development, Chicago Stock Exchange (US)
John Harrington, President and CEO, Harrington Investments, Inc. (US)
Leo Hindery, Jr., Managing Partner, InterMedia Partners, LP, a media industry private equity fund (US)
Leslie Christian, Senior Investment Adviser, NorthStar Asset Management Inc. (US)
Lief Doerring, Senior Principal Development Specialist, DAI Global (US)
Prof. Lynn A. Stout, Distinguished Professor of Corporate and Business Law, Clarke Business Law Institute at the Cornell Law School, and member of the CFA (Chartered Financial Analyst) Institute Board of Governors (US)
Richard Eskow, former President, HEI, a subsidiary of American International Group (AIG), and risk management consultant (US)
Julie Goodridge, CEO, NorthStar Asset Management, Inc. (US)
Robert Zevin, Chairman, Zevin Asset Management (US)
Marshall Auerback, Global Portfolio Strategist, Madison Street Partners LLC (US)
Adam Kanzer, Managing Director and General Counsel, Domini Social Investments, LLC (US)
Contact information
Anna Ratcliff, +44 7796993288 or anna.ratcliff@oxfam.org
For updates, please follow @Oxfam.
More on the RobinHood Tax Campaign
Ten European countries are negotiating the European Financial Transaction Tax including Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia, and Spain.
The European Commission estimates the FTT will raise €22 billion per year
In 2015 EU agriculture spending was €9.03 billion in France, €5.47 billion in Italy, and €6.04 billion in Germany
Opinion polls were conducted in France, Belgium and Slovenia in August 2016 by the online market research company, Research Now. Of the 1030 people polled in France 71 percent of people agreed or strongly agreed that financial speculation must be limited through a tax on financial transactions and 73 percent of people said that France should contribute constructively to the FTT negotiations to ensure they succeed. 61 percent of the 1000 people polled in Belgium and Slovenia agreed or strongly agreed that their country should implement the FTT with other European partners.
The European Robin Hood Tax coalition is an alliance of trade unions, faith groups, development and environmental organisations and domestic charities from across Europe.
LETTER FROM FINANCIAL INDUSTRY PROFESSIONALS TO LEADERS OF THE 10 EUROPEAN COUNTRIES WORKING TO INTRODUCE FINANCIAL TRANSACTION TAX
Chancellor Christian Kern, AUSTRIA
Prime Minister Charles Michel, BELGIUM
President Macron, FRANCE
Chancellor Angela Merkel, GERMANY
Prime Minister Alexis Tsipras, GREECE
Prime Minister Paolo Gentiloni, ITALY
Prime Minister António Costa, PORTUGAL
Prime Minister Robert Fico, SLOVAKIA
President of the Government Miro Cerar, SLOVENIA
Prime Minister Mariano Rajoy, SPAIN
Dear European leaders,
As individuals with first-hand knowledge and significant experience in the financial industry, we urge you to introduce small financial transaction taxes (FTTs). These taxes will rebalance financial markets away from a short-term trading mentality that has contributed to instability in our financial markets. They also have the potential to raise significant revenue.
In the last few decades, financial market activity has increased tremendously, with the value of transactions now 70 times greater than the size of the real global economy. The primary role of financial markets is to raise investment, allocate resources efficiently, and mitigate risk. However, much of today’s financial activity does not contribute to these goals. Computer-driven, high frequency trading, for example, allocates resources on the basis of algorithms designed to turn very short-term profits and have been shown to drain liquidity in stressed markets when it is needed most. FTTs of a small fraction of a percent on each trade would moderate the incentives for such short-term speculation while having a negligible impact on long-term investment.
Concerns have been raised that FTTs could damage growth. But a growing body of evidence suggests that by reducing volatility, adding long-term liquidity, and raising much needed revenue, the overall effect would be significantly positive. Critics have also wrongly claimed that the exit of the UK from the EU is reason to delay or suspend FTT talks to entice London finance firms to move to mainland Europe. As industry professionals, we can assure you that these firms would base a decision on whether or not to relocate on many factors beyond a small transaction tax, especially given the fact that the UK already applies a tax on stock trades.
FTTs have a proven track record. Numerous countries, including those with deep and fast-growing markets, such as the UK, South Africa, Hong Kong, Singapore, Switzerland, and India, currently have FTTs on particular asset classes that raise billions of dollars per year. Additional FTTs, such as those your 10 countries are currently working to introduce, offer a real opportunity to help restore the financial sector to its proper role, while raising substantial revenues for people in urgent need at home and in the world’s poorest countries.
We urge you, for the reasons of stability, resilience and revenue outlined above, to do all in your power to finalise FTT negotiations so that implementation may happen at the earliest time. We believe this is an opportunity that should not be missed.
Yours faithfully,
Dr. Wilfried Stadler, former CEO, Investkredit Bank (Austria)
Benoît Lallemand, former Senior Internal Consultant and Service Excellence Manager, Euroclear Bank SA (Belgium)
Luc Bomans, former Executive Vice President, JP Morgan, and former CEO, Euroclear Securities Clearing System (Belgium)
Marc Bellis, former CEO of Corporate, Institutional and Public Banking Fortis (Belgium)
Robert Thys, former Director of International Affairs, NYSE Euronext Paris (Belgium)
Bernard Bayot, President, NewB; Director, Réseau Financité and Former President, European Financial Inclusion Network (EFIN) (Belgium)
Prof. Eric De Keuleneer, Professor of Finance, Université Libre de Bruxelles and CEO of Credibe (former Office Central de Crédit Hypothécaire) (Belgium)
Lars Pehrson, Managing Director, Merkur Andelskasse (Merkur Cooperative Bank) (Denmark)
Jean-Louis Bancel, President, Crédit Coopératif (France)
Rainer Geiger, former Deputy Director, Financial and Enterprise Affairs, OECD (France)
Stéphane Voisin, Financial Analyst (France)
Gunther Capelle-Blancard, Member of French Financial Market Authority (AMF) Scientific Advisory Board, Professor at the University Paris 1 Pantheon – Sorbonne, Deputy Dean of the Sorbonne School of Economics (France)
Bernd Kloth, Board Member, Pax-Bank eG (Germany)
Dirk Müller, Financial Expert and Former Broker, Frankfurt (Germany)
Dr. Klaus Schraudner, Chairman of the Board, Pax-Bank eG (Germany)
Klaus Euler, Chairman of the Board, Ethik bank (Germany)
Matthias Lehnert, Managing Director, Oikocredit (Germany)
Prof. Dr. Max Otte, Investment Fund Manager, Economist (Germany)
Richard Boeger, Managing Director, Bank für Kirche und Caritas eG (Germany)
Thomas Jorberg, Executive Board Spokesman, GLS Gemeinschaftsbank eG (Germany)
Prof. Dr. Rainer Lenz, Professor of Finance at the University of Applied Sciences, Bielefeld (Germany)
Andrea Baranes, President, Ethical Finance Foundation (Italy)
Luca Mattiazzi, General Manager, Etica Sgr (Italy)
Ugo Biggeri, President, Banca Popolare Etica (Italy)
Giulio Romani, Secretary General, FIRST CISL, (Italy)
Agostino Megale, Secretary General, FISAC-CGIL (Italy)
Massimo Masi, Secretary General, UILCA (Italy)
Prof. Dr. Marc Chesney, Professor of Finance, University of Zurich (Switzerland)
Lord Adair Turner, former Chairman of the UK Financial Services Authority (UK)
Alastair Constance, Managing Director, Ethical Currency Limited (UK)
Avinash Persaud, Chairman, Intelligence Capital Limited & Chairman, Elara Capital PLC, and former head of Currency and Commodity Research, JP Morgan (UK)
Dr. Paul Wilmott, Proprietor, Wilmott magazine and the quantitative finance portal wilmott.com, and Former Partner, Caissa Capital (UK)
Prof. Stephany Griffith-Jones, Financial Markets Program Director at the Initiative for Policy Dialogue, Columbia University, and former Head of the Department of Credit for the Public Sector at the Central Bank of Chile and Latin American analyst, Barclays Bank (UK)
Raj Thamotheram, Founder and Co-Chair, Preventable Surprises, former President, Network for Sustainable Financial Markets, and former Director of Responsible Investment, AXA Investment Managers (UK)
Rev. Iain May, BSc MBA BD, former Senior Manager RBS and Head of Planning Strategy, AIB Bank, current Chair, Castle Community Bank (UK)
Sony Kapoor, Managing Director, Re-Define, Visiting Scholar, the IMF, and former derivatives trader (UK)
Andrew Sheng, former Chairman, Securities and Futures Commission (Hong Kong)
Rob Johnson, President, Institute for New Economic Thinking, Senior Fellow at the Roosevelt Institute, former Managing Director at Soros Fund Management and former Chief Economist of the US Senate Banking Committee (US)
Amy Domini, Trustee, The Sustainability Group of Loring, Wolcott & Coolidge (US)
Doug Cliggott, Lecturer, University of Massachusetts-Amherst, and former Managing Director and U.S. Equity Strategist, JP Morgan (US)
Dr. Hazel Henderson, President, Ethical Markets Media, and former Advisory Council member, Calvert Social Investment Fund (US)
Dr. William Barclay, former Senior Vice President, Planning and Development, Chicago Stock Exchange (US)
John Harrington, President and CEO, Harrington Investments, Inc. (US)
Leo Hindery, Jr., Managing Partner, InterMedia Partners, LP, a media industry private equity fund (US)
Leslie Christian, Senior Investment Adviser, NorthStar Asset Management Inc. (US)
Lief Doerring, Senior Principal Development Specialist, DAI Global (US)
Prof. Lynn A. Stout, Distinguished Professor of Corporate and Business Law, Clarke Business Law Institute at the Cornell Law School, and member of the CFA (Chartered Financial Analyst) Institute Board of Governors (US)
Richard Eskow, former President, HEI, a subsidiary of American International Group (AIG), and risk management consultant (US)
Julie Goodridge, CEO, NorthStar Asset Management, Inc. (US)
Robert Zevin, Chairman, Zevin Asset Management (US)
Marshall Auerback, Global Portfolio Strategist, Madison Street Partners LLC (US)
Adam Kanzer, Managing Director and General Counsel, Domini Social Investments, LLC (US)
Anna Ratcliff, +44 7796993288 or anna.ratcliff@oxfam.org
For updates, please follow @Oxfam.
More on the RobinHood Tax Campaign