GFMA to G-20: Transaction tax would hurt monetary policy

07/16/2013 | Trade News (U.K.), The

GFMA has written to Group of 20 central banks saying Europe's proposed financial-transaction tax would wreak havoc on monetary policy. GFMA, citing International Capital Market Association research, says this would happen because the tax would significantly curtail the repo market. "The FTT will increase the cost of equity and debt financing for both governments and corporates, increase the cost of hedging transactions undertaken in the real economy in order to manage risk, and create a further headwind to the global and European economic recovery," according to GFMA's letter.

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