The effects of a financial transaction tax on European households' savings
The effects of a financial transaction tax on European households' savings
Published 18 Feb 2014
This study, commissioned by the International Regulatory Strategy Group (IRSG) and authored by London Economics, considers the impact of the proposed financial transactions tax (FTT) on European households’ savings arising through its effect on the value of equity and debt holdings in six EU member states. The member states covered in this study include four that plan to introduce FTT (Germany, Italy, Spain and Slovakia) and two who do not (UK and Luxembourg).
It finds that countries intending to introduce the FTT are likely to suffer significant losses in household savings portfolios as a result of taxing a broad range of financial instruments. In larger states with sizeable capital markets, this loss could amount to as much as €205bn, or 16% of the total value of equity and debt holdings. Households in the UK and Luxembourg also stand to lose an estimated €4.4bn and €0.4bn respectively, as a result of the FTTs extraterritorial reach.
If the FTT is borne by the end-users of financial services, this will hold back household consumption and slow economic growth.
The effects of a financial transaction tax on European households' savings
Published 18 Feb 2014
This study, commissioned by the International Regulatory Strategy Group (IRSG) and authored by London Economics, considers the impact of the proposed financial transactions tax (FTT) on European households’ savings arising through its effect on the value of equity and debt holdings in six EU member states. The member states covered in this study include four that plan to introduce FTT (Germany, Italy, Spain and Slovakia) and two who do not (UK and Luxembourg).
It finds that countries intending to introduce the FTT are likely to suffer significant losses in household savings portfolios as a result of taxing a broad range of financial instruments. In larger states with sizeable capital markets, this loss could amount to as much as €205bn, or 16% of the total value of equity and debt holdings. Households in the UK and Luxembourg also stand to lose an estimated €4.4bn and €0.4bn respectively, as a result of the FTTs extraterritorial reach.
If the FTT is borne by the end-users of financial services, this will hold back household consumption and slow economic growth.
Download 'The effects of a financial transaction tax on European households' savings' from the City of London's website.
You may also be interested in the following reports onon FTT:
A Financial Transaction Tax - review of impact assessments
Financial Transaction Taxes- high level summary of tax options
Implications of a Financial Transaction Tax for the European regulatory reform agenda
The impact of a Financial Transaction Tax on corporate and sovereign debt