French banks stumble as Sarkozy introduces Tobin Tax
French banks have been sold down heavily this morning on news the French government is to implement a financial transaction tax this year – even if it is not implemented elsewehere in Europe.
According to Reuters, France’s finance minister Francois Baroin confirmed the new tax would hit equities, bonds and derivatives. It is expected to be set at a rate of 0.1%
A Bill is targeted for February, which means the policy could be law by April.
French president Nicolas Sarkozy said on French television yesterday: “There’s no reason why deregulated finance, which brought us to the current situation, can’t participate in the restoration of our accounts.
According to Bloomberg the share price of BNP Paribas fell in early trading by 4.1%.
Societe Generale fell 4.3% and Credit Agricole fell 2.7%.
However, Bloomberg reports that the new tax will not hit bonds.