WSBI ESBG

Auditing, Accounting and Reporting

ESBG members support the aim to curb short-term speculation and to encourage the prohibition of undesirable market behaviour

Financial Transaction Tax (FTT)​

Eight ESBG members support the aim to curb short-term speculation and to encourage the prohibition of undesirable market behaviour. However, they do not support a Financial Transaction Tax at EU-level.

Identified Concerns

ESBG’s main concern with the current EU FTT proposal is that – in efficient fixed income markets such as the markets for government and covered bonds, which are characterised by low spreads between bid and offer prices – the tax will be far higher than what can be earned on market-making, especially on instruments with short remaining time to maturity. ​

Proposed Solutionsand Actions

The impact on financial activities essential to the functioning of financial markets and to the real economy could be extremely negative. We believe that the following activities will be affected negatively by the proposed tax:

  • The issuance and secondary markets for sovereign bonds
  • The use of derivatives contract for hedging purposes
  • The use of repurchase agreements to provide secured liquidity to the market
  • Market-making activities
  • The use of intra-group transactions for liquidity management and efficient capital allocation within a group.

Background

A Financial Transaction Tax (FTT) builds on the work of famous Nobel laureate James Tobin. An FTT is in theory applied to a financial transaction in a similar way to how VAT is applied to goods and services but due to the very narrow margins and the international character of finance the FTT, if incorrectly implemented, may have a severe distortive impact on the economy as a whole.

Read the full position

Our latest content on Auditing, Accounting and Reporting

Data Act – An open data economy should be multilateral and cross-sectoral

ESBG's response to the European Commission consultation on the proposed Data Act calls for a horizontal regulatory approach to establish a consistent and harmonised rules for all sectors. ESBG is the…

Overtime for Ukrainian war refugees: DSGV employees donate over 100,000 euros through extra work

European Savings and Retail Banking Group members are standing in solidarity with people in need in Ukraine.

Stand with Ukraine: Erste family provides extensive humanitarian aid

European Savings and Retail Banking Group members are standing in solidarity with people in need in Ukraine.

The German Savings Banks Association ( DSVG ): More than 100,000 accounts already opened for Ukrainian war refugees

European Savings and Retail Banking Group members are standing in solidarity with people in need in Ukraine.

CaixaBank has been leveraging its network of branches in Spain to assist asylum seekers and refugees fleeing Ukraine

European Savings and Retail Banking Group members are standing in solidarity with people in need in Ukraine.