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In Favor of a Genuine Tax on Financial Transactions

Jean-Charles Rochet * Professeur de banque, GFRI (Geneva Finance Research Institute), Université de Genève ; membre, Toulouse School of Economics (TSE). Contact :
Ivar EKELAND * Professeur émérite, CEREMADE, Université Paris-Dauphine. Contact :

Following the sub-prime crisis, in 2010 the European Parliament asked the Commission to implement a tax on financial transactions intended to discourage purely speculative financial transactions. To date, only France (2012) and Italy (2013) have introduced such a tax. The French financial transaction tax experiment has been studied in a number of academic articles, the main empirical results of which are quite concordant. However, the recommendations they draw from are quite different. To try to understand these differences, we will present the different arguments against the tax. We then explain why we are not convinced by them, then we formulate a series of proposals for extending the FTT. These proposals, if adopted, would in our view lead to a genuine FTT, which could increase tax revenues without much negative impact.

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