ROBIN HOOD: A MODEL FOR FUTURE BANKING?

by Catherine Stihler MEP

When Robin Hood set off with Friar Tuck and his merry men to rescue Maid Marion from the evil clutches of the Sheriff of Nottingham, no-one would have thought that we would be looking to Robin Hood centuries later as inspiration to solve our banking crisis with the introduction of a financial transaction tax? Today Robin Hood can be seen in the millions of citizens in the UK who seek some form of justice from the financial sector for the banking crisis through the Robin Hood Tax campaign, whilst the Sir Fred Goodwins of this world are the modern day Sheriff of Nottingham. The campaign is simply suggesting a 0.05 per cent transaction cost which would raise billions of pounds, curb market volatility and reckless behaviour in asset markets, and vastly reduce short term speculation in transactions after years of excessive trading activity. This would apply to non public transactions-thus this does not apply to those using a cash point but on those who trade often with our pensions and savings. I spoke in plenary this week supporting the Robin Hood Tax campaign and an assessment by the IMF of the potential benefits of an FTT (financial transactions tax) is due to be published this month.  It would be more attractive than a pure tobin tax, as it does not discriminate against specific types of markets and is much easier to levy a tax on organised exchanges than in a dealership market like the global foreign exchange market. There is really no reason why a 0.05 per cent tax could not be applied. This is a political decision which would be best made at a global level - the G20 have alluded to an FTT there is still no concrete solution. Like all tales of a hero against a villain there are a few points which have to ironed out.

The FTT idea has received enthusiastic support from the international community.  As Robin Hood shared the money he gathered to help the poor and needy, so too is the purpose of the FTT. We want to avoid future crises with good regulation and ensure a level playing field for everyday investors without unnecessary risk burdens. The very players responsible for causing the current crisis should play their role in repaying society. However who would reap the benefit from an FTT? Some see it as purely focused on funding domestic public services, others want to see it helping the developing world. Others want the victims of climate change to benefit whilst many want to see such a fund contributing to a pot which will may be used in future crisis thus ensuring no public funded bailouts in the future. All of these are worthy recipients of an FTT. I believe for the FTT to work effectively I would like to see the 80.20 principle applying. I would like 80 per cent to go to public services including international development commitments whilst 20per cent would go to a fund which would be used for any future financial crises. Robin Hood and his principles are as relevant today as they were hundreds of years ago. Today there are still heroes and villains. Let's hope that the hero succeeds in the end.