MFA Blog: Report Notes Drawbacks of Proposed EU FTT

The Managed Funds Association ("MFA") Blog reported that a recent review of academic literature done by PricewaterhouseCoopers LLP ("PWC") indicates that the planned European financial transaction tax ("FTT") may fail to reduce market risks and could increase costs.

The report consists of a literature review of studies that have examined the proposed FTT, and was commissioned by 27 trade groups including the Alternative Investment Management Association ("AIMA"), CME Group, ICE Group, Futures and Options Association ("FOA"), and the Association of Foreign Banks ("AFB"). The report further notes that the proposal could fail to address the interconnectedness of global financial bodies. A summary of the most important arguments, for and against the FTT, begins on page 13.

See: PWC Report; MFA Blog Post. Related news: MFA Blog: European FTT Could Have Wide-Ranging Effects on Portfolios (August 12, 2013); MFA Blog: FTTs Put a Dent in French and Italian Trading (August 7, 2013); Analysis of European Commission Staff on Proposed Financial Transaction Tax (May 23, 2013).