More NewsOver 90% of Corporates and FIs Reject Idea of Tobin Tax

Over 90% of Corporates and FIs Reject Idea of Tobin Tax

More than nine out of 10 corporations and financial institutions around the world oppose government proposals to impose a tax on financial transactions, according to a Greenwich Market Pulse.

In Europe, French President Nicholas Sarkozy and UK Prime Minister Gordon Brown have aggressively pushed for the establishment of a ‘Tobin Tax’, named after Nobel-Prize winning economist James Tobin, who first suggested the measure. The proposed transaction tax, which also has the support of German Chancellor Angela Merkel, would be designed to generate funds for future crises.

However, prospects for the establishment of a global transaction tax received a setback recently when US President Barack Obama proposed a new tax on bank liabilities. Assuming that the US administration would not go so far as to levy both taxes on its banks, most observers have concluded that other countries will not act to saddle their own banks with a transaction tax in the absence of US participation. The UK’s Brown says he will continue pushing the proposal, which he says is “gaining traction around the world”.

Among the 330 investors and corporate executives around the world surveyed by Greenwich Associates from 11-15 January 2010, support for a global transactions tax tops out at 12% among corporates and financials in continental Europe. In other regions, opposition approaches 100%.

“In all regions, corporations and financial institutions believe the imposition of a Tobin/Transaction Tax would have a sharply negative impact on investment returns, market liquidity and pricing, and on companies’ ability to raise capital,” said Greenwich Associates consultant Andrew Awad.

Related Articles

Preparing for GDPR? Here’s four things to consider

More News Preparing for GDPR? Here’s four things to consider

3m Elliott Wiseman
Cash flow in focus for investors

Cash Management Cash flow in focus for investors

4m Conor Deegan
Treasury TV: Karen Pugsley, Domino's Pizza Group

More News Treasury TV: Karen Pugsley, Domino's Pizza Group

4m Victoria Beckett
Treasury TV: Yeng Butler compares US and European MMF reforms

Compliance Treasury TV: Yeng Butler compares US and European MMF reforms

4m Victoria Beckett
Treasury TV: Tim de Knegt, The Port of Rotterdam

10 Minutes With The Treasury Treasury TV: Tim de Knegt, The Port of Rotterdam

4m Victoria Beckett
Banks are selling clients short with short dated cash deposit U-turns

Banking Banks are selling clients short with short dated cash deposit U-turns

4m Victoria Beckett
What does sterling’s Brexit boost mean for UK manufacturers?

More News What does sterling’s Brexit boost mean for UK manufacturers?

5m Tasja Botha
FX for corporates: 5 best practices for treasurers

Economy FX for corporates: 5 best practices for treasurers

5m Mateo Graziosi