Curbing the Growth of Stock Trading? Order-to-Trade Ratios and Financial Transaction Taxes

AbstractThis chapter analyses the pros and cons of financial transaction taxes (FTT) as mechanisms to mitigate financial instability and the proposal of the European Commission to implement an FTT in the EU in September 2011 until its suspension, as well as the prospects for it to be adopted in the future.

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Financial Transaction Taxes

Reinventing Financial Regulation ◽

10.1007/978-1-4302-4558-2_12 ◽

2015 ◽

pp. 175-200

Author(s):

Avinash D. Persaud

Keyword(s):

Financial Transaction ◽

Transaction Taxes

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The Global Financial Crisis and the Stabilizing Effect of Financial Transaction Taxes

International Conference on Eurasian Economies 2014 ◽

10.36880/c05.00890 ◽

2014 ◽

Author(s):

Deniz Aytaç

Keyword(s):

Financial Crises ◽

Global Financial Crisis ◽

Capital Inflows ◽

Economic Damage ◽

Short Term ◽

Capital Movements ◽

Financial Transaction ◽

Stabilizing Effect ◽

Transaction Taxes ◽

The Global Financial Crisis

With the liberalization policies that started in the 1980s, almost a race began in lifting the barriers to capital movements, particularly in developing countries, with the aim of achieving capital inflows from countries with a savings surplus to countries with a current deficit. However, the crises that broke out one after another in the liberalized financial markets in the 1990’s and the global crisis that occurred in the 2007-2008 period as a result of increased volatility in short-term capital movements and of excessive credit growth have raised again the need to bring short-term capital movements under control. The present study discusses the feasibility of financial transaction taxes as a stabilizer in the economy due to the need to mitigate the destructive impacts of financial crises and to finance the economic damage after the crisis or, in other words, the increased need for fiscal consolidation resulting from the crisis. In the light of the findings obtained, it has been noted that financial transaction taxes applied at a low rate in financing the increased public debt on account of the support provided to the financial sector because of the crisis constitute an important item of revenue due to the high volatility in short-term capital movements. In this context, it has been concluded that financial transaction taxes, although difficulties are encountered in their application, can have a considerable stabilizing effect in the future, taking the periodical nature of financial crises into account.

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Financial Transaction Taxes, Market Composition, and Liquidity

The Journal of Finance ◽

10.1111/jofi.12510 ◽

2017 ◽

Vol 72 (6) ◽

pp. 2685-2716 ◽

Cited By ~ 24

Author(s):

JEAN-EDOUARD COLLIARD ◽

PETER HOFFMANN

Keyword(s):

Financial Transaction ◽

Market Composition ◽

Transaction Taxes

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The financial transaction tax: an ANOVA assessment of selected EU countries

Equilibrium ◽

10.24136/eq.2020.002 ◽

2020 ◽

Vol 15 (1) ◽

pp. 29-48

Author(s):

Manuela Raisová ◽

Martina Regásková ◽

Kornélia Lazányi

Keyword(s):

Economic Growth ◽

Value Added ◽

Gdp Growth ◽

Financial Transaction ◽

Eu Countries ◽

The United Kingdom ◽

Financial Transaction Tax ◽

Transaction Taxes ◽

Transaction Tax ◽

The Eu

Research background: There are various forms of fiscal taxation of the financial assets. In recent times, the discussion about financial transaction tax in the EU is associated with finding the solution to problems due to great financial crisis. The European Commission has made some efforts to strengthen capital regulation and it has adopted the Directive about implementing enhanced cooperation in the field of financial transaction tax, where it analyzed options and impacts of FTT according to those countries which have already implemented similar transaction taxes in their national legislatives. Purpose of the article: Our aim is to find out the economic relationship between FTT and economic growth and to analyze the effect of FTT within selected EU countries. Methods: In this paper, we will analyze the banking environment in the EU area, and we emphasize the correlation between tax policy and economic growth. We will test FTT through three-way mixed-effects ANOVA, and analyze three Member states, Belgium, Ireland and the United Kingdom, which have very active attitude to implementation of FTT within other EU countries. Findings & Value added: We are interested in: (1) testing the relationship between the financial transaction tax (FTT) and economic growth (GDP); and (2) to verify the hypothesis that FTT could improve GDP growth in a country. We assume that if a country has adopted FTT in its tax system, then it will lead to a significant GDP growth, and so it could lead to financial market improvement after the crisis. Our results have shown that an increase in FTT volume would lead only to a negligible increase in the economic growth.

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