VIEWPOINT


Regulatory changes, discussions around a Tobin Tax.


Isn’t the biggest global financial market actually in a good shape?


understand that most of them are not in favor of structural market reforms. As a matter of fact most of the market participants are of the strong opinion that FX markets are well controlled – a reason supported by the fact that the markets performed with just the smallest of interruptions during all the recent turmoil.


Also the revitalized idea by some political leaders about a financial transaction or Tobin tax adds only uncertainty and raises questions over which model would be best for the market participants and the future of the industry. No one welcomes an additional tax. Recent studies have shown that only a small minority feel that the FX markets would benefit from both clearing house and exchange-traded requirements.


Hitting the good players By Alfred Schorno, Managing Partner, 360 Trading Networks


So far the Foreign Exchange market has survived everything. It got through the Lehman crisis and has survived all impacts post Lehman from the Greek financial crises, the European debt crisis and also doubts about the survival of the Euro and despite all this claims for additional regulatory controls and tighter currency regulations are not running dry.


of further market regulation on their businesses. Speaking to a wide range of market participants, we


I 94 | october 2011 e-FOREX


t remains a reality that politics could finish off what nothing else could. Te majority of FX professionals express concerns about the impact


A minimal understanding of the globalized market structure shows that a transaction tax on FX would only hit the ones which cannot move their business or avoid it, in other words the “good” players like corporates. For corporate customers an additional tax will have a direct impact and lead to an additional cost which will be carried forward to the real economy and potentially harm a delicate economic recovery; it will have no impact on those it is supposed to target, namely institutional users or hedge funds, as these market participants can easily move their trading locations to countries or market places which are not implementing such tax changes.


Despite all these political, sometimes tactical, initiatives and discussion, the future remains unknown. Te only thing which is clear is that the US is looking to drive for more transparency and


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