The Robin Hood Tax - an interesting video

[PhotoLady]

Shared from the Unity March News facebook page.... an interesting watch, if only for the two actors who are in it:

Announced tonight The Labour Party are committed to the Robin Hood Tax.
The other name for it is a financial transactions tax, where a small levy is placed on certain financial transactions or trades.
Labour will go further and extend the levy to bonds and more complex financial instruments called derivatives, which would raise £26bn over the course of the next Parliament.
The bankers caused the mess and then were paid bonuses afterwards, Labour will redress the balance.

[cyprusgrump]

HOW DID FRANCE'S ROBIN HOOD TAX WORK OUT?

Five years on, what have been the consequences of France’s transaction tax? A recent European Central Bank paper looked at the impacts on French equity markets, and for the most part it concludes that the outcomes of the tax were quite bad.

Market liquidity fell a lot, by 20% for affected stocks. Revenues were much lower than anticipated – an estimated €475m instead of the €1.6bn that had been predicted – “which once again points at an underestimation of the impact on revenue-generating market activity”.

Importantly, volatility rose and price efficiency fell, even though the tax exempted intraday trading (allowing “short-term arbitrageurs to continue eliminating price inefficiencies quickly”). Though the overall effect was small (but statistically significant), the rebate scheme masked a large effect on volatility in shares that were exempt.

The paper’s authors conclude that the French FTT had an overall negative impact on market quality, where reducing market liquidity led to less efficient pricing of assets and more volatile price movements, and effectively priced high-frequency trading out of existence altogether in affected shares. “The decrease in volume associated with the FTT hurt liquidity and crowded out “useful” trades.”

Labour - wrong every time!