Comments on: The European Financial Transaction Tax – A ‘What if"

By: Charlie

Charlie — Thu, 18 Aug 2011 16:20:22 +0000

Such a tax could be used to create an insurance fund for banks to call on instead of the public purse. It could even be voluntary - on condition that those choosing to opt out would be ineligible for any future bail-outs.

The idea that such a tax would reduce efficiency and profits could be countered by the evidence that the accelerated speculation of recent years hasn't been a resounding success. It's time to save the market fundamentalists from themselves.

By: Neil

Neil — Thu, 18 Aug 2011 15:23:11 +0000

The Telegraph is running live coverage of the debt crisis. One point: "the yields on 10-year US government bonds (Treasuries) fell below 2pc for the first time EVER this afternoon".

By: Havoc Bunny

Havoc Bunny — Thu, 18 Aug 2011 15:13:29 +0000

Germany and "temporary" taxes? LOL

Kaiser William introduced the champagne tax to build his High Seas Fleet. Now, those Dreadnoughts have been scuttled in Scapa 90 years ago yet the Germans are still paying this very tax with each bottle of sparkling wine they purchase. ;)

By: Neil

Neil — Thu, 18 Aug 2011 13:23:44 +0000

From Monday's Independent:

"[...] borrowing from the ECB's overnight lending facility jumped from €147m (£129m) on Tuesday night to €4.1bn overnight by Thursday. In money markets, the three-month Euribor:OIS spread, a measure of credit/liquidity risk in wholesale funding markets, has risen sharply to its highest level since April 2009."

By: Sean

Sean — Thu, 18 Aug 2011 13:12:37 +0000

It was a fun bit of theater was it not?

nothing is going to happen until the fat lady sings which is sometime in Sept.

http://vicepilot.blogspot.com/2011/07/sensitive-constellation.html

By: andrew

andrew — Thu, 18 Aug 2011 12:56:27 +0000

the article quotes a precedent for a " latin countries currency alliance " at end of nineteenth century for fourty years post 1866

By: andrew

andrew — Thu, 18 Aug 2011 12:52:03 +0000

there was an interesting comment piece in the times ( paywall ) to the effect that the best solution to europes troubles would be a federation of france, italy spain, latin countries + some east europen countries with floated currency +separately a german mark based alliance.

By: Tam

Tam — Thu, 18 Aug 2011 12:27:29 +0000

has anyone else noticed the high street banks are gradually reducing their shared ATM access?

Obviously this is bad news for a lot of customers who don't live near to the relevant bank, but I wonder if it's also intended to make the banks decouple and increase stability? As it is, a public run on one bank could conceivably bring all the others down due to the shared cashpoints. Reducing the access like this should make them a bit less vulnerable to that, which is probably a good thing...

By: Neil

Neil — Thu, 18 Aug 2011 12:17:31 +0000

From the BBC at midday today (Thursday):

"Bank shares were hit again after the European Central Bank (ECB) lent dollars to an unnamed eurozone bank.

The loan, on Wednesday, was the first of its kind since February, and a further sign of worries within the eurozone economy.

One bidder borrowed $500m (£303m) the ECB said, but did not disclose the identity of the bank.
[...]
In London, Royal Bank of Scotland fell by 4.6%, Barclays fell 4.7%, HSBC Holdings was down 3.4%, and Lloyds Banking Group shed 4.2%.

In Germany, Deutsche Bank was down 4%, while in France, Societe Generale fell 5.2% and Credit Agricole dropped 4%."

By: Golem XIV - Thoughts

Golem XIV - Thoughts — Thu, 18 Aug 2011 11:08:33 +0000

Charlie,

That is exactly what it was proposed for. And I think it is a very good idea. But that leaves open where the revenue for the tax would go. I am simply suggesting that Merkel and Sarkozy might see the revenue it would generate as a way of giving the ECB a source of funding which it could happiliy use to underpin its 'new' role as buyer of last resort of rubbish bank debt.

In addition to which it begins the longer term project of giving the EU level of government its own tax base.