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Parliament adopts ambitious approach on financial transaction tax
May 23, 2012--The proposed financial transaction tax should be better designed to capture more traders and make evasion unprofitable, said the European Parliament in its opinion adopted on Wednesday. The opinion also says the tax should go ahead even if only some Member States opt for it.
The tax rates proposed by the Commission (0.1% for shares and bonds and 0.01% for derivatives) are considered suitable and pension funds should be the only sector exempted from the tax.
Parliament has been calling for a financial transaction tax (FTT), for close to two years and the Commission tabled a legislative proposal for one late in 2011. The latest Eurobarometer survey shows that 66% of Europeans favour such a tax.
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Source: European Parliament
BATS talks to rivals over European futures launch
May 22, 2012--BATS Europe is in talks with exchange rivals over a clearing deal that will allow the share trading platform to break into European futures and challenge incumbents NYSE Euronext and Deutsche Boerse.
BATS Europe, which handles about a quarter of European share trading, has approached the main exchanges about recruiting their clearing houses to back its push into futures, something it plans to do this year.
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Source: Reuters
STOXX Q2/2012 Quarterly Review
Results of the First Regular Quarterly Review to be Effective on June 18, 2012
May 22, 2012--STOXX Limited, the market-moving provider of innovative, tradable and global index concepts, today announced the new composition of the STOXX Benchmark and their sub- and
sector indices, among them the STOXX Europe 600 Index, STOXX Americas 600 Index and STOXX Asia/Pacific 600 Index.
As announced previously, with this review the STOXX Americas 600 Index will be renamed to STOXX North
America 600 Index as of June 18, 2012. The index is a sub-set of the STOXX Global 1800 Index, and
represents the 600 largest companies in the Americas portion of the global index. As it only covers
Canada and the United States, the index will be renamed to STOXX North America 600 Index for clarity’s
sake. The index universe of this index remains unchanged
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Source: STOXX
United Kingdom Could Ease Monetary Policy, Credit to Boost Growth
May 22, 2012 -With inflation well anchored, there is room to ease monetary policy further
Budget-neutral infrastructure spending can help economy recover
Stronger supervision of financial sector a priority
At a time of intensified global uncertainty, the United Kingdom’s approach to reducing debt levels to put the budget on a more sustainable footing has reinforced credibility, the IMF said as it wrapped up its annual check-up of the U.K. economy.
The government is implementing strong fiscal consolidation to reduce budgetary risks. The IMF said the Bank of England has been nimble in easing monetary policy to support growth. This policy mix helps rebalance the economy toward investment and external demand.
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Source: IMF
United Kingdom-2012 Article IV Consultation Concluding Statement of the Mission
May 22, 2012--The Central Scenario and Risks
1. Current policies are aimed at assisting economic rebalancing and financial sector stability. Strong fiscal consolidation is underway and reducing the high structural deficit over the medium term remains essential. The UK has made substantial progress toward achieving a more sustainable budgetary position and reducing fiscal risks.
Bold monetary stimulus has helped support the economy, as has the free operation of automatic fiscal stabilizers. This macroeconomic policy mix assists in rebalancing the economy toward investment and external demand. Further, financial sector stability in the UK is of global importance as highlighted in spillover analysis. In this context, policies have encouraged the buildup of capital and liquidity buffers, the domestic oversight framework is being strengthened, and work is underway to enhance the capacity to deal with systemically important financial institutions
2. But the economy has been flat. The hand-off from public to private demand-led growth has not fully materialized. Much of this underperformance relative to earlier expectations is due to transitory commodity price shocks and heightened uncertainty following the intensification of stress in the euro area. However, the weak recovery also indicates that the process of unwinding pre-crisis imbalances is likely to be more protracted than previously anticipated, in part due to persistent tight credit conditions. Reflecting these forces, output remains more than 4 percent below its pre-crisis peak. Encouragingly, labor market performance has been better, with falling unemployment in recent months and fewer employment losses than in the aftermath of previous major UK recessions. This disparity between output and labor market indicators complicates the assessment of the current state of the economy. But unemployment at 8.2 percent, with a large number of youth without a job, is still much too high.
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Source: IMF
Financial transaction tax: getting the financial sector to contribute towards the cost of the crisis
May 22, 2012--How can the financial sector be made to contribute to the cost of the crisis it helped to create? Greek socialist Anni Podimata argues in her report that introducing a financial transaction tax would go a long way towards stamping out banks' risky behaviour while at the same time replenishing government coffers with much needed funds.
The Parliament will debate and vote on Ms Podimata's report in plenary on Wednesday 23 May.
Governments have not hesitated to use taxpayers' money to bail out the financial system, yet many are hesitant about taxing financial transactions to get some of that money back.
The facts are undisputable. The financial sector caused the current crisis, which will cost governments €4.5 trillion in bail-outs, while it remains largely under-taxed compared to the real economy. The European Parliament launched the idea of a financial transaction tax back in the public debate with its 2010 report on innovative means of financing, creating a fresh momentum in favour of the financial transaction tax. The arguments of the financial sector against the financial transaction tax collapsed when the European Commission, under pressure from the European Parliament, undertook an impact assessment, which pointed out that introducing the financial transaction tax at EU level is not only feasible, but will also generate significant revenue without harming the European economy's competitiveness.
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Source: European Parliament
DB X-trackers rolls out 2x leveraged long & short government bond ETFs
May 21, 2012--DB X-trackers, the ETF platform of Deutsche Bank, has launched four new ETFs aimed at professional investors who want daily double-leveraged long or short exposure to US and UK sovereign debt.
The four ETFs, which have been listed on the London Stock Exchange (LSE), enable investors to implement daily double-long or double-short positions in UK Gilts and US Treasuries for the purposes of short-term tactical trading or hedging.
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Source: ETF Strategy
Linhares seeks faster rate of growth in Europe
May 21, 2012--The exchange-traded fund market in Europe may be in good health after doubling in assets to $325bn since stock markets dive-bombed in 2008
, but Joe Linhares, European chief executive at the world’s largest ETF provider, iShares, wants more.
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Source: Financial News
SPDR ETFs on UK gilts and corporate bonds launched on Xetra
May 18, 2012--Four new exchange-listed bond index funds issued by SPDR (State Street Global Advisors) have been tradable on Xetra since Friday.
ETF name: SPDR Barclays Capital 1-5 Year Gilt ETF
Asset class: bond index ETF
ISIN: IE00B6YX5K17
Total expense ratio: 0.15 percent
Distribution policy: distributing
Benchmark: The Barclays Capital UK Gilt 1-5 Year Index
ETF name: SPDR Barclays Capital 15+ Year Gilt ETF
Asset class: bond index ETF
ISIN: IE00B6YX5L24
Total expense ratio: 0.15 percent
Distribution policy: distributing
Benchmark: The Barclays Capital UK Gilt 15+ Year Index
ETF name: SPDR Barclays Capital UK Gilt ETF
Asset class: bond index ETF
ISIN: IE00B3W74078
Total expense ratio: 0.15 percent
Distribution policy: distributing
Benchmark: The Barclays Capital UK Gilt Index
ETF name: SPDR Barclays Capital Sterling Corporate Bond ETF
Asset class: bond index ETF
ISIN: IE00B4694Z11
Total expense ratio: 0.15 percent
Distribution policy: distributing
Benchmark: The Barclays Capital Sterling Corporate Bond Index
The three SPDR ETFs on Barclays Capital UK Gilt indices provide investors with first-time access to the UK gilt market with the option of reacting to interest rate expectations within the different maturity ranges.
The SPDR Barclays Capital Sterling Corporate Bond ETF enables investors for the first time to participate in the performance of Sterling-denominated corporate bonds with investment grade ratings.
The product offering in Deutsche Börse’s XTF segment currently comprises a total of 974 exchange-listed index funds, making it the largest offering of all European stock exchanges.
Source: Xetra
European markets tumble after Moody's downgrades 16 Spanish banks
May 18, 2012--European stock markets faced their biggest weekly decline today since November, after 16 Spanish banks were downgraded by Moody's overnight and Fitch cut its debt rating for Greece.
Spain's main share index fell more than 2% before recovering, while shares in London fell by as much as 1%.
The downgrading included Banco Santander, the eurozone’s largest bank, owing to a weak economy and the government’s inability to bail-out the troubled lenders
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Source: The Finance page
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