27 May 2010 Edition

Resize: A A A Print

Time for a tax on speculative currency transactions

Reacting on Tuesday to a new proposal by Internal Markets Commissioner Michel Barnier to put a levy on banks to support the sector in times of weakness, Sinn Féin Spokesperson on Finance Arthur Morgan called for the introduction of an international Tobin tax on speculative currency transactions.
Deputy Morgan said it is important to remember that market bubbles and crashes are not the result of the “uncoordinated interactions of individuals, but of strategic actions by speculators, bankers, brokers, media and regulators, facilitated by Government policies.”     “The banks lament at the prospect of a levy or a tax on speculative financial transactions and threaten that their lending capacities would be diminished, but after decades of risky, irresponsible practices they sought to be bailed out by taxpayers,” he said. “This cannot continue. The case for this levy or transaction tax has never been more wanting as taxpayers  are forced to cover the losses of the banking sector. An insurance fund for the financial sector should be developed to cover events in the future, instead of turning to taxpayers.”
Morgan pointed out that there is a protocol for such funds when there are natural disasters and given the crippling ramifications of financial crises, there should be one for the banking sector.
“Now is the time to introduce a Tobin tax, an international tax on speculative currency transactions which would discourage short-term speculation so that all activity going on in the financial sector would be diminished relative to productive investment only.”

An Phoblacht
44 Parnell Sq.
Dublin 1
Ireland