(IBD) Financial Transactions Tax Will Not Make Markets More Stable And Might Hurt Economic Growth

Posted by Kendall Harmon

There is no evidence that an FTT would moderate market volatility — and attenuate sudden shifts of mood on financial markets.

A recent report by Anna Pomeranets from the Bank of Canada concluded that there have been instances when an FTT led to an increase in volatility — most significantly on the New York Stock Exchange and the American Stock Exchange, between 1932 and 1981, where increases in the FTT were associated with rising volatility, increased bid-ask spreads, and lower trading volumes.

Similarly, the idea that capital is under-taxed in current tax regimes is mistaken.

Read More At Investor's Business Daily: http://news.investors.com/ibd-editorials-viewpoint/052913-658027-financial-transaction-tax-in-europe-will-not-raise-much-money-and-may-hurt-growth.htm#ixzz2UmJX6SiT
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Filed under: * Economics, PoliticsEconomyCredit MarketsCurrency MarketsStock MarketTaxesThe Banking System/Sector* International News & CommentaryEurope

Posted May 30, 2013 at 7:24 am [Printer Friendly] [Print w/ comments]
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