LONDON: Banning some trading activities and taxing stock and bond transactions would cut the contribution of the European Union’s financial sector to jobs and growth significantly, a study published by the City of London said.
The 34-page study conducted by consultancy PwC looked at two future scenarios, a “supportive” regulatory environment that allows the sector to grow, and a harsher one that curbs growth.
It said financial services also create jobs beyond the sector and tougher regulation would lead to 11 million fewer jobs being generated across the economy by 2030.
Mark Boleat, head of policy at the City of London, the municipal authority for London’s financial district, said the report was not an attack on regulation but a call for properly calibrated rules that allow the sector to make money in a sustainable way.
Some of the rules being planned would also make it harder for the EU to create a capital markets union to help markets raise more funds for the economy, the study said.
“Policymakers should carefully consider the potential impacts of new regulatory initiatives such as bank structural reforms and the financial transaction tax… on the sector’s ability to continue supporting economic growth,” the study said.
Next Tuesday the European Parliament will vote on a draft EU law that could ban so-called proprietary trading at banks or where bets on market moves are taken using the bank’s own money.
