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Wednesday, February 01, 2012

Sarkozy: a Tobin Tax is an "absurdity"

In a debate with Francois Hollande and François Bayrou, a youthful Nicolas Sarkozy calls the Tobin Tax an “absurdity”. You heard that right. Sarkozy - who recently announced his plan to introduce a Financial Transaction Tax(FTT) by the 1st of August “with or without the others” - warns in a 1999 TV debate of the dangers of excessive financial regulation.

In particular, he argues:
“If we tax, none of the other countries will do so,” adding that “penalising wealth creation in our country will only serve to benefit wealth creation elsewhere, unemployment for us and jobs for the others”.
He’s clearly changed his mind.


Rik said...

A sort of FTT that could work should imho look more like an insurance. Governments effectively guaranty several aspects of banks.
Just let them pay for that according to the risk involved. Small amount X low risk=very low premium.
Big amount X high risk=high premium.
Of course you likely have to split it in different guarantees.
The good thing is that that if premiums are calculated correctly it will limit excessive risk taking.
Combine with a nationalisation act if capital gets under certain limits for longer than say 6 months.
Brings in the funding, reduces risktaking and if cies with excessive risks move abroad, you can be glad that they are gone.

Rollo said...

Is Rik suggesting EU imposed Credit Default Swaps?