Comment on European financial transaction tax

For the UK a European transaction tax on financial trades would be especially damaging. London has long been the global capital of many trading activities – for instance London has 37% of global FX trading, 46% of global interest rate OTC derivatives trading, 19% of foreign equities trading. That lead would be truly challenged were the tax imposed – regulation must be thought through in order to preserve this leading global position.

A transaction tax would threaten the competiveness of not just the UK, but of the EU. It would provide the catalyst for trading firms to move away from the EU to other jurisdictions where this tax is not imposed.

By its very nature, regulation on a G20 basis facilitates common global standards; where regulation is implemented on a European basis the regulators must ensure there is no impact on the competitiveness of the region – otherwise they risk damaging jobs and growth in the region.