French transaction tax loophole could prompt tougher European regimes

A twist in the tale of the transaction tax


In 1984, Sweden launched its first financial transaction tax (FTT), a 0.5% levy on equity trades. Over the next six years, it was refined and extended to other asset classes, including bonds and derivatives. The results were stark. Roughly half of Swedish equity trading migrated to London. Bond trading volumes dropped 85%, even though the tax rate was just three basis points. The volume of futures trading fell 98%, and the options market effectively disappeared.

It is an old story that has

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