According to the head of Nordea Bank AB, the European Commission’s suggested financial-transaction tax will undoubtedly push business out of Europe and further hurt its economic recovery. The proposal has already been approved by both Germany and France.
“Right now we have very fragile financial markets, we know the funding markets are not working,” said Christian Clausen, CEO of the Norde Bank, as well as president of the European Banking Federation. “Any tax of this magnitude would impact banks and society quite a lot.”
The proposed plan is set to take effect in 2014. It will raise around $76.5 billion a year, and set minimum tax rates for financial transactions throughout the EU.
According to the EU, the proposal would assess trading of stocks and bonds at a 0.1% rate. The tax is meant for banks, investment firms, insurance companies, pension funds, stockbrokers and hedge funds, including hedge fund risk management, as well as other types of financial firms.
“It’s time for the financial sector to make a contribution back to society,” the Jose Manuel Barroso, European Commission President, said last month.