Sunday, August 30, 2009

A Tobin Tax?

The chairman of the British Financial Services Authority (FSA) has muted the idea of a tax on international financial transactions, often known as a Tobin tax.

This idea has a lot of support amongst liberals in France (or, at least certainly did in the rather left-wing economics department of the University of Grenoble UPMF). Attac (Association pour une Taxe Tobin pour l'Aide aux Citoyens) was an extremely popular organisation campaigning for such a tax with the aim of using the funds for development and other worthwhile causes.

Lord Turner, the chair of the FSA emphasised that he didn't think that the UK should unilaterally impose such a tax, although, Canada already has a similar one.

I must admit that I don't really know enough about it to form an opinion either way. It has crossed my mind in the past as to whether it might be a good way for the International Monetary Fund (IMF) to raise funds, which could then be used during financial crises. It would be a sort of insurance premium, and one of the main roles of the IMF is to promote financial stability.

Well done for getting to the bottom of that rather heavy finance post! You deserve to spend a few moments browsing People of Walmart :) (HT: Roving Bandit).

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