Will trading dissapear with Robin Hood tax?

[Doomberg]

It looks like the Robin Hood tax may be getting passed in the UK after all to help save the Eurozone. The thing is this could have a massive effect on trading if not destroy it, we'd have massive spreads, more slippage, less liquidity and a range of other fees and issues. The thing is England is not like countries such as Germany, we don't have massive industry like BMW / Mercadies etc we just have financial institutions and if that was taxed massively we could be in trouble.

Whats your opinions on this so called Robin Hood tax?

 

[Lord Flasheart]

It looks like the Robin Hood tax may be getting passed in the UK after all to help save the Eurozone. The thing is this could have a massive effect on trading if not destroy it, we'd have massive spreads, more slippage, less liquidity and a range of other fees and issues. The thing is England is not like countries such as Germany, we don't have massive industry like BMW / Mercadies etc we just have financial institutions and if that was taxed massively we could be in trouble.

Whats your opinions on this so called Robin Hood tax?

why would the spreads get wider and more slippage,surely the volume will still be there

 

[jesteruk]

I thought the whole point of Cameron walking out of the new agreement on Friday was to avoid that very tax? He recognised the affect that would have on us and walked away

 

[donaldduke]

The FTT wasnt even part of Friday's agreement. malta and others who are against the ftt got it removed.

"Malta successful at EU summit

Malta's efforts to keep its economic flexibility paid off this afternoon as a possible introduction of a Financial Transaction Tax and a Common Corporate Tax Base as originally proposed by France and Germany were removed from the final agreement."

http://www.timesofmalta.com/articles/view/20111209/local/malta-successful-at-eu-summit.397605


This is not to say the stupid european socialists have given up completely on the FTT, its just wasnt part of Friday's agreement

 

[new_trader]

"Thousands of Robin Hood supporters believe that banks, hedge funds and the rest of the financial sector should pay their fair share to clear up the mess they helped create."

Brainless and naive supporters. I didn't support the bank bailouts and now the only people who will pay all the new taxes as a result are hard working taxpayers, as usual. The Government and Bank of England helped create this mess and now the prudent will be made to pay for the mistakes of the feckless, which includes anyone who bought a house thinking they were going to make money because that's what the TV told them.

 

[donaldduke]

It looks like the Robin Hood tax may be getting passed in the UK after all to help save the Eurozone.

How did you come to this conclusion (the FTT may be getting passed in the UK) anyway?

The UK position has always been that it is not going to happen in the UK unless there is also a global agreement to implement it.

 

[Mr. Charts]

No sweat, ain't going to happen here.

 

[Trader333]

Of course the rest of the EU want it because they do almost no financial transactions compared to London. The UK are right to stay out of this EU madness that is currently going on and as DD has already said that unless there is global agreement on FTT it will not happen. If the EU implemented it on their own it would be a disaster for them driving business to where it does not exist.

The current policies being agreed to within the EU where "foreign non elected" officials are dictating what will happen in countries such as Greece and Italy could easily result in revolution. Sooner or later the austerity measures being taken and the ease with which the internet is now able to create populist uprisings will probably be the trigger that starts this.

Governments world wide have still not latched on the the fact that the internet is moving politics into an entirely new realm where past methods for exerting control on populations will, and have already, failed. The attempt by the larger economies within the EU to stamp control on other members states will, in my view, ultimately utterly fail. This will happen when a new wave uprisings occur in member states against those currently in power that were not elected in the first place.


Paul

 

[Eric Geddes]

Unless the USA agree to Tobin/Robin Hood it's dead in the water in UK. By all means, if the Eurozone want to stuff themselves then that's fine - but that would just make them even more disadvantaged compared to London. What they want with EEC Tobin is just to extract loads of tax fom London at relatively little cost to themselves.

Simples! Cameron has stopped that, and the political morons in the EEC will have to find another way; but they will now be more wary since they have seen a British PM with some backbone unlike some of his predecessors. You don't deal with bullies by doing the Labour / LibDem thing of trying to be nice.

 

[Chartsy]

why would the spreads get wider and more slippage,surely the volume will still be there

Assuming it does pass:

The vast majority of trades are making the spread-that's why spreads are so tight, market makers trying to grab a tick here and there.

If the tax passes, you won't see many market makers trying to take half a tick- competition to compete for making the spread is going to fall, or at least it would remain the same BUT the spread would have to be wider to compensate for the cost. Similarly if your RTs on a contract were minuscule, you could try small gains without much commission, but if they pentupled, you'd find yourself only wanting to shoot for bigger targets.

If there's less people putting their bids and offers up, you're going to get more slippage by hitting the bid or lifting the offer.

It's self defeating though I think- if you tax transactions, they're going to disappear; you won't make any taxes if there's no transactions to tax.


Go Cameron.

 

[safvan]

How can such changes be made if every thing ends back up at Federal Reserve/ECB?

Banks are slaves to the big daddy Fed and if it does not want this tax, I do not think it can be implemented.

 

[Pferd]

According to the proposal it will only apply to "big" investors/traders, meaning banks, insurance companies and hedge funds.

The small investor and even mid-size companies will be exent.

Having said that it will not work if it is not approved worldwide at the same time. Especially nowadays with Internet trading. And for sure there always be one (UK/USA) refusing to implement it. So the idea is Dead on Arrival.

Furthermore there is the experience of countries which have tried this, ie Sweden. Volume went down 90% in their exchange. That is a lot of tax revenue at risk.....

So this is going nowhere. But at this time politicians think they sound smart when they create a tool to punish bankers and financial speculators in general. But they have no real intention of approve it, neither a chance of success.

They have no idea of what they are talking about. Similar to ban short selling in bank shares. It has been a huge success, hasn't? Bank share prices are falling faster than before.