Italy’s Consob: “FTT will raise the cost of hedging”

The introduction of a tax on financial transactions could make Italy’s derivative markets less liquid and more risky, Giuseppe Vegas, president at Italy’s stock market regulator Consob, has warned.

Speaking at a parliamentary hearing in Rome today, Vegas said that the government’s planned tax on financial transactions will also raise the cost of hedging risk, as well as discouraging risk taking.

Italy is one of the 10 countries which have backed the European Commission plan to impose a levy on financial transactions to raise funds.

In line with the proposal, Italy’s latest budget plan includes a tax of 0.05% on most market transactions, including those involving derivatives.

The Commission estimated that the tax could raise €57bn if applied across the entire Union, but the proposal has been already severely criticised by industry associations.

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