Reuters Breakingviews: EU transaction tax’s a la carte menu
Wednesday, April 10, 2013 - 03:59
April 10 - The ICMA calls for exemptions from the EU’s so-called Robin Hood tax, but the repo market should be the only exemption, says Reuters Breakingviews, and only temporarily at that.
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The European retail market is under threat joining me is not breaking news bank economist only -- -- had to explain. This quite complex story I'm gonna say this is the the U. Financial transaction tax. I'm what it does to the warning potentially does to the repo market should be exempt. I think this year it's yes and -- trying to explain why I'm in the repurchase agreement market to read them all okay Schultz. Is essentially a way that's. Financial institutions and companies as well free financial institutions. Can get access to short term funding and what do is take a little bit of collateral against us so it's a more secure -- form of lending and borrowing. Now they rely on this quite heavily banks of the moments. -- there's a reason to think that you should exams. That from a transaction tax and still got troubles bubbling in Europe -- the sovereign -- you know Cyprus. At least there's -- I mean do you do you -- Cyprus but troubles bubbly and in sovereign right and and and the periphery. If it wasn't so that. Wouldn't. Would you still be going for an exemption. Well this a case for saying you do need to private sector we pay -- market because the European central bank and amendments go this. Long term refinancing operation -- it's basically doing a -- -- two along the banks in the system. The -- at some stage during the European Central Park it's gonna need to get. -- liquidity out of the system a moment to do it is actually through the read them all cassette -- one way today that it could help. The question is once that's been done. In the future and many years hands and some people think the LT all right should miles from the -- -- ten years to get rid of -- of the European. Banking sector's problems may be at that stage you could say when actually now we can look at tax in the repo market as well price. How how hard would the -- wrong -- be -- well one start do you do which is meant to be commissioned by the biggest mobile -- has said that kids white paneled. Or with the repo market would maturities up to one man by making it cannot on the economic and that's kind of where the bulk of that. The stock -- and most of -- time and he says that 66%. To 92 thuds of the entire European market. We would vanish and read this start. The -- MA study. As you say exempt so once all fixed income market making is exempt. Well that's another part of it yes and he wants the European -- them out of economy -- -- But it also wants any buying -- and financial institution the makes markets. In fixed income securities exempt as well and about Paul the days. Ludicrous because the whole pot points at the financial transaction tax the Europe's role in who attacks. Is to try and make the financial sector pay -- that Chad. To society at the moment that on the tax is a sector -- -- pay the eighteen -- -- what's likely to happen Dominic how quickly turning it what you see at the moment as you see countries going their own -- a little -- home. That Europe's taxing them on the financial transaction tax. Is meant to come in next year in January 2014. He voted -- France and Italy from student in August 2012. Italy had done in a mosque from march this year trying to introduce their own. Questions that stump you tonight we have here in the UK irons it's and want to do the same effect to drift to the scene as well said. People assigned to do during thing the Netherlands rejected that we projects in the UK. -- it's starting to become a bit of which are excited. We we can't have too many exemptions the repo markets arguably one area probably the only area where they should be a. Look at -- you may educates parents and couples who happens -- -- From breaking news more -- setting inside what's our US show every day talk studies and 1730 bsc. -- the -- was his choices.
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