Hostname: page-component-78c5997874-v9fdk Total loading time: 0 Render date: 2024-11-19T09:21:30.933Z Has data issue: false hasContentIssue false
  • English
  • Français

Socializing Global Economic Governance: Introducing a Financial Transaction Tax

Published online by Cambridge University Press:  06 August 2018

Vladimir Nikolaevitch Zuev  and
Elena Yakovlevna Ostrovskaya
Vladimir Nikolaevitch Zuev
Affiliation:
National Research University – Higher School of Economics, Myasnitskaya 20, Moscow 101000, Russia. Email: vzuev@hse.ru, eostrovskaya@hse.ru
Elena Yakovlevna Ostrovskaya
Affiliation:
National Research University – Higher School of Economics, Myasnitskaya 20, Moscow 101000, Russia. Email: vzuev@hse.ru, eostrovskaya@hse.ru
Get access Rights & Permissions [Opens in a new window]

Abstract

The uncontrolled exponential growth of the financial sector and its rapid globalization led to an equally rapid increase in challenges to the global financial system. The already undertaken measures aimed at improving financial stability are necessary, yet not sustainable enough. The aim of this article is to provide more analytical arguments to favour another solution – the introduction of the Financial Transaction Tax (FTT), and to increase the public and academic awareness of the necessity of such a measure. The ongoing reforms do not solve the key problem – the enormous cost to rescue the financial sector, subsidized to a large extent by the taxpayer, and the absence of a fair contribution from the financial sector. FTT as a tool to discourage excessive speculation without hindering other activities seems to be a socially responsible measure working for financial stability at the same time. To efficiently socialize its impact, however, it is critical to define exact patterns of spending of the funds raised by the states.

Type
Articles
Information
European Review , Volume 26 , Issue 4 , October 2018 , pp. 686 - 703
Copyright
© Academia Europaea 2018 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

References and Notes

1. Underhill, G. and Zhang, X. (2008) Setting the rules: private power, political underpinnings, and legitimacy in global monetary and financial governance. International Affairs, 84(3), pp. 535–554.Google Scholar
2. Tsingou, E. (2003) Transnational policy communities and financial governance: the role of private actors in derivatives regulation. http://warwick.ac.uk/2009/1/WRAP_Tsingou_wp11103.pdf Google Scholar
3. Kroll, C. and Schraad-Tischler, D. (2015) Global financial system report. stabilizing global financial markets. www.sgi-network.org/docs/2015/thematic/SGI2015_Global_Financial_System.pdf Google Scholar
4. James, P. and Patomäk, H. (2006) Globalizing Finance and the New Economy: A Critical Introduction (London: Sage Publications)Google Scholar
5. Kokotsis, E. (1999) Keeping International Commitments: Compliance, Credibility and the G7, 1988-1995 (New York: Garland)Google Scholar
6. Kirton, J. (2004) Multilateral Organizations and G8 Governance: A Framework for Analysis (Aldershot: Ashgate)Google Scholar
7. Bayne, N. (2000) Hanging in There: the G7 and the G8 Summit in Maturity and Renewal (Aldershot: Ashgate)Google Scholar
8. Ch. Shen (2006) Determinants of the financial supervision system: global evidence. Banks and Bank Systems, 1(2), pp. 36–56.Google Scholar
9. Shaffer, G. (2005) Power, governance, and the WTO: a comparative institutional approach. In: M. Barnett and R. Duvall (Eds), Power in Global Governance (Cambridge: Cambridge University Press).Google Scholar
10.Fiscal Monitor, IMF, www.imf.org/external/ns/cs.aspxid=262 Google Scholar
11. M. Xafa (2010) Role of the IMF in the Global Financial Crisis. Cato Journal, 30(3), pp. 475–489.Google Scholar
12. Ch. Sungjoon and R. Claire (2012) Promises and perils of new global governance: a case of the G20. Journal of International Common Law, 1, http://scholarship.kentlaw.iit.edu/fac_schol/159 Google Scholar
13. Larionova, M., Rakhmangulov, M. and Shelepov, A. (2015) The G8-G20 Relationship in Global Governance (Aldershot: Ashgate), pp. 65–97.Google Scholar
14. Zuev, V. (2010) Financial Stability Board – a new international institute implementing a ‘soft’ regulation under the conditions of a ‘harsh’ crisis. International Organizations Research Journal, 2, pp. 72–82.Google Scholar
15. https://www.iosco.org/about/subsection=about_iosco Google Scholar
16.IAIS Annual Report 2013-2014, www.iaisweb.org/2013-14_Annual_Report.pdf Google Scholar
17.Basel III phase-in arrangements. Bank for International settlements (2013), www.bis.org/bcbs/basel3/basel3_phase_in_arrangements.pdf Google Scholar
18.Principles for Reducing Reliance on CRA Ratings. www.fsb.org/wp-content/uploads/r_101027.pdf Google Scholar
19.FSI Survey. Basel II, 2.5 and III implementation. Bank for International Settlements, July 2015. www.bis.org/fsi/fsiop2015.pdf Google Scholar
20.‘… supervision of global financial institutions requires strong relations among supervisors worldwide’. Speech by Mr Laurence H. Meyer, Member of the Board of Governors of the US Federal Reserve System, at the Federal Financial Institutions Examination Council, International Banking Conference, held in Arlington, Virginia, 31 May 2000, www.bis.org/review/r000608b.pdf Google Scholar
21. Gros, D. (2013) The problems of Basel principles usage in the EU. Banking union with a sovereign virus: the self-serving treatment of sovereign debt. Intereconomics, 48(2), pp. 93–97.Google Scholar
22.Basel 4 – emerging from the mist? (2013), www.kpmg.com/ID/en/IssuesAndInsights/ArticlesPublications/Documents/Basel4-Emerging-from-the-Mist.pdf Google Scholar
23.Revisions to the Standardized Approach for credit risk – second consultative document. Bank for international settlements (2015), www.bis.org/bcbs/publ/d347.pdf Google Scholar
24.FSB, Promoting global adherence to international cooperation and information exchange standards (2010), www.financialstabilityboard.org/publications/r_100310.pdf Google Scholar
25. Baxter, L. (2011) Exploring the WFO option for global banking regulation. In: L. Boulle (Ed.), Globalization & Governance (Syber Ink), pp. 113–124. https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=2971&context=faculty_scholarship Google Scholar
26. Cherednychenko, O. (2016) Cooperative or competitive? Private regulators and public supervisors in the post-crisis European financial services landscape. Policy and Society, 35(1), pp. 103–114.Google Scholar
27. Young, K. ( 2013) Financial industry groups’ adaptation to the post-crisis regulatory environment: changing approaches to the policy cycle. Regulation & Governance, 7, pp. 460–480.Google Scholar
28.Market Intermediary Business Continuity and Recovery Planning. OICU-IOSCO (2015) www.iosco.org/library/pubdocs/pdf/IOSCOPD523.pdf Google Scholar
29. Paudyn, B. (2013) Credit rating agencies and the sovereign debt crisis: performing the politics of creditworthiness through risk and uncertainty. Review of International Political Economy, 20(4), pp. 788–818.Google Scholar
30.Basel Committee on Banking Supervision. Bank for International Settlements, www.bis.org/bcbs/ Google Scholar
31.Policy Framework for Strengthening Oversight and Regulation of Shadow Banking Entities and Policy Framework for Addressing Shadow Banking Risks in Security Lending and Repos. Financial Stability Board, www.fsb.org/wp-content/uploads/c_130129y.pdf Google Scholar
32. Tobias, A. (2014) Financial stability policies for shadow banking. Staff Report, Federal Reserve Bank of New York, 664, p 9.Google Scholar
33. Bruno, V. and Song Shin, H. (2014) Cross-border banking and global liquidity. Bank for International Settlements, www.bis.org/publ/work458.pdf Google Scholar
34.FSB launches and invites feedback on its Peer Review on implementation of the FSB policy framework for shadow banking entities, www.fsb.org/2015/07/ Google Scholar
35.Implementation and effects of the G20 financial regulatory reforms. Report of the Financial Stability Board to G20 Leaders. FSB, 2015, http://fsb.org/wp-content/uploads/Report-on-implementation-and-effects-of-reforms-final Google Scholar
36. Brummer, C. (2012) Soft Law and the International Financial System: Rule Making in the 21st Century (New York: Cambridge University Press).Google Scholar
37. Keynes, J. (1961) General Theory of Employment, Interest and Money (New York: Harcourt Brace), pp. 159–160.Google Scholar
38. Krugman, P. (2009) Making banking boring. The New York Times, 9 April.Google Scholar
39.Revised policy framework for banks’ equity investments in funds issued by the Basel Committee (2013) www.bis.org/press/p131213.htm Google Scholar
40. Baker, D. (2016) The benefits of a financial transaction tax. New York Times, 28 January, www.nytimes.com/2016/01/28/opinion/the-need-for-a-tax-on-financial-trading.html Google Scholar
41.French financial transaction tax on equity securities. Latest developments and practical implications for the market, www.pwc.be/en/financial-services-newsalert/2012/landwell-fftt-pdf-aug-2012.pdf Google Scholar
42. Piketty, T. (2014) Capital in the 21st century (Cambridge, MA: Harvard University Press).Google Scholar
43. Burman, L. and Gale, W. (2015) Financial transaction taxes in theory and practice Urban Institute & Brookings Institute, www.taxpolicycenter.org/PDF/2000287-Financial-Transaction-Taxes-in-Theory-and-Practice Google Scholar
44. Maurice, E. (2015) EU Financial Transaction Tax on life support. EU Observer, https://euobserver.com/economic/131435 Google Scholar
45.The need for a tax on financial trading. New York Times, 28 January 2016, www.nytimes.com/2016/01/28/opinion/the-need-for-a-tax-on-financial-trading.html?_r=0 Google Scholar
46. Seely, A. (2014) The Tobin tax: recent developments. Library of the House of Commons.Google Scholar
47. Hemmelgarn, T. and Nicodeme, G. (2015) Financial transaction taxes in the European Union. European Commission Taxation Papers, 62.Google Scholar
48.1000 Economists Tell G20: Support a Robin Hood Tax. 12 April 2011, http://robinhoodtax.org.uk/1000-economists-tell-g20-support-robin-hood-tax Google Scholar
49. Hemmelgarn, T. and Nicodeme, G. (2015) Financial transaction taxes in the European Union. European Commission Taxation Papers, 63.Google Scholar
50. Schaefer, D. (2015) Fiscal and Economic Impacts of a Limited Financial Transactions Tax (Berlin: Deutsches Institut fuer Wirtschaftsforschung).Google Scholar