FTT will hit end-users hardest, says EACT chairman
10 February 2012
Joe Dalton
A European financial transaction tax (FTT) will hit end-users in the real economy – such as companies and pension funds – hardest, according to European Association of Corporate Treasurers (EACT) chairman Richard Raeburn.
Raeburn was speaking before a European Parliament committee on economic and monetary affairs on Monday.
Economist Stephany Griffith-Jones, of Columbia University, and Avinash Persaud, of financial advisory firm Intelligence Capital also presented to MEPs.
Raeburn said banks will pass the cost of the FTT onto companies to maintain their profit margins and if the banks take a consistent position towards customers then even the strongest companies will be unable to resist.
“End-users may react to higher costs by reducing the use of derivatives and by reorganising activities so that their hedging can continue without the direct and indirect cost of FTT,” said Raeburn.
“Reduced hedging means more risk is left in the real economy which leads to greater caution on investment decisions and...
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