Did you not notice the gigantic financial crisis?
The crisis was the result of complex mortgage-backed assets, insurance companies writing suicidal credit default swaps and highly leveraged banks – and nothing to do with short-term share trading. The exception is the overnight repurchase market, which suffered the equivalent of bank runs and involves short-term trading. But the repo market is excluded from the new European Commission proposal. So the FTT is at best irrelevant to financial stability.
But surely you’re not saying we shouldn’t tax banks and bankers?
Of course we should. I’m with the IMF on this: the FTT is feasible but we have better options, including value added tax on financial services or taxing balance-sheet debt to reduce leverage. To invert an old saying, the FTT is the best possible tax on banks – apart from all the other ones that have been tried.
It’s simply a horribly bad idea.