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The European Commission's Proposal for a Financial Transactions Tax: A Critical Assessment

Grahl, J. and Lysandrou, P. (2014). The European Commission's Proposal for a Financial Transactions Tax: A Critical Assessment. JCMS-JOURNAL OF COMMON MARKET STUDIES, 52(2), pp. 234-249. doi: 10.1111/jcms.12086

Abstract

A financial activities tax (FAT) and a financial transactions tax (FTT) are the main alternative ways of recouping some of the public money used to bail out the financial sector after the great crisis of 2007–08. In preparing a common proposal for the European Union, the European Commission initially appeared to favour the FAT, but then swung its weight behind the FTT in late 2011. Its rationale was that in addition to generating revenue, this tax could also help to stabilize the financial markets by curbing excessive speculative trading. This article takes a different position. Its central argument is that the FTT would amplify rather than dampen market instability by interfering with the functions of important financial institutions. Its chief conclusion is that the FAT is superior to the FTT.

Publication Type: Article
Additional Information: This is the peer reviewed version of the following article: Grahl, J. and Lysandrou, P. (2014). The European Commission's Proposal for a Financial Transactions Tax: A Critical Assessment. JCMS-JOURNAL OF COMMON MARKET STUDIES, 52(2), pp. 234-249, which has been published in final form at https://doi.org/10.1111/jcms.12086. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.
Subjects: H Social Sciences > HG Finance
J Political Science > JN Political institutions (Europe)
Departments: School of Arts & Social Sciences > International Politics
Date Deposited: 20 Aug 2020 13:01
URI: https://openaccess.city.ac.uk/id/eprint/24670
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