A European financial transaction tax on equities and derivatives trades could be damaging for European liquidity levels and the City of London, but it also looks set to impose serious operational challenges for banks, brokers and their buy-side clients following the failure of a UK appeal to the European Court of Justice earlier this year.
One may speculate that with Chancellor Angela Merkel’s Christian Democratic party having secured a quite remarkable third term in office, the last in a long line of potential hurdles for the advocates of a Financial Transaction Tax (FTT) in Europe has been overcome
Market participants have condemned a proposal in the UK House of Commons that calls for the UK government to consider implementing a tax on high-frequency trading activity in the country.
The European Parliament has voted to approve the introduction of a financial transaction tax across 11 EU member states including France, Germany and Italy – but market participants warn that it may have unintended consequences.
