Arbeitspapier
Financial transaction tax contributes to more sustainability in financial markets
We argue that a financial transaction tax complements financial market regulation. With the tax, governments have an additional instrument at hand to influence trading activity. FTT aims to reduce regulatory arbitrage, flash trading, overactive portfolio management, excessive leverage and speculative transactions of financial institutions. The focus clearly addresses these classes of activities that have contributed to the financial crisis. However, if contrary to expectations harmful transactions will not be curbed, FFT generates at least large tax revenues that can contribute to cover the costs of the financial crisis. The trend towards centralized clearing and depositaries makes tax evasion more difficult than it was in the past. Tax avoidance is, of course, never completely avoidable. Therefore the effect of the tax should be monitored closely so that governments can react quickly if tax loopholes and taxinduced geographical relocation plans of financial institutions come to light.
- Language
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Englisch
- Bibliographic citation
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Series: DIW Discussion Papers ; No. 1198
- Classification
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Wirtschaft
Financial Institutions and Services: General
Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
Financial Institutions and Services: Government Policy and Regulation
- Subject
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Financial stability
transaction tax
public good
central depository
- Event
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Geistige Schöpfung
- (who)
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Schäfer, Dorothea
- Event
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Veröffentlichung
- (who)
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Deutsches Institut für Wirtschaftsforschung (DIW)
- (where)
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Berlin
- (when)
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2012
- Handle
- Last update
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10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Schäfer, Dorothea
- Deutsches Institut für Wirtschaftsforschung (DIW)
Time of origin
- 2012
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Agenda for a New Financial Market Architecture
Agenda for Building a New Financial Market Architecture
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Will the stress tests for banks improve the stability of financial markets?
"A financial system should be able to restore stability autonomously": Seven questions to Dorothea Schäfer
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