Bankers' resistance to regulation prompts new call for financial transaction tax

Bankers resisting plans to cut bonuses and reform the sector at the World Economic Forum have inspired anti-poverty campaigners to renew demands for a financial transaction tax to reduce global inequality.

The World Development Movement, one of the organisations backing the tax, says the additional revenue could finance a ‘green new deal’ in rich nations while providing money for poorer countries to develop low carbon economies and cope with the impact of climate change. The tax would also increase financial stability and dampen the risks of sudden food and oil price rises by deterring reckless speculation on debt, equity and commodity markets.

Julian Oram, head of policy at the World Development Movement said:
"The financial sector has grown way too big for its boots, to the extent that the whole global economy is vulnerable to the fortunes of bankers gambling on the markets.

“It's absurd for bankers to be up in arms about regulation given the damage they’ve caused, but it's encouraging us to campaign harder. This is an industry that generates $50 trillion worth of transactions a year. Taxing just a tiny fraction of this would slow down the financial roulette wheel and generate billions of dollars in public revenue that could be of huge benefit to society in both rich and poor countries.

"Gordon Brown has rightly backed the introduction of such a tax, but he got it wrong when he said that the revenue should be spent on propping up the banking sector, rather than on people who are suffering at the hands of an out-of-control financial system."