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ICAP threatens UK exit over Tobin tax

Interdealer broker convinced European levy would be devastating for wholesale financial markets

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ICAP CEO Michael Spencer threatened to leave London if European lawmakers introduce a controversial financial transaction tax, Spencer said in an analyst conference call.

European plans for a so-called Tobin tax progressed this week when European Commission president Jose Manuel Barroso outlined his plan to see a tax of 0.1 percent levied on all financial transactions.

Spencer said such a measure would see the "highly mobile" wholesale financial markets in Europe “evaporate” and would prompt Icap to move its operations away from London “extremely rapidly”.

In a series of damning statements, Spencer said the prospect was an example of European policymakers “unable to address the real facts of life”. He dismissed estimates from Brussels that the financial transactions tax would deliver €55 billion (£48 billion) in annual revenues as being “sadly deluded”.

Spencer said the ambition was “simply not achievable” and likely to be vetoed by the British government because it would effectively be a “tax on the City of London for the benefit of the euro zone”.

The EC president’s call for a financial transaction tax to be implemented follows statements of support for the proposals from German chancellor Angela Merkel and French president Nicolas Sarkozy.


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