Financiers Letter
Updated: Sep 4
An Unprecedented Call from Inside the Industry
Writing in 2017, amidst prolonged negotiations among ten European nations working to introduce a regional Financial Transaction Tax, an extraordinary coalition of financial insiders stepped forward to demand action. Addressed to the heads of state of Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia, and Spain, this open letter represented a powerful endorsement of the tax from the very sector it sought to regulate. Signed by fifty-two prominent financial industry professionals, including former regulatory chairmen, banking executives, hedge fund managers, and leading academics, the letter forcefully urged European leaders to finalise their negotiations and implement a robust tax to rein in speculative excess and generate vital public revenue.
The Core Proposal: Rebalancing the Markets
The signatories leveraged their first-hand knowledge and significant experience within the financial industry to advocate for the immediate introduction of small Financial Transaction Taxes. The core proposition of the letter was that these levies are essential to rebalance financial markets away from the dangerous, short-term trading mentality that had severely compromised global economic stability. The professionals argued that applying a tax of merely a small fraction of a per cent on each trade would successfully moderate the distorted incentives driving short-term speculation, while simultaneously having a completely negligible impact on genuine, long-term investment.
The Evidence: Restoring Finance to its Proper Role
To contextualise the urgent need for intervention, the letter presented a stark reality regarding the explosive, unchecked growth of the financial sector. The authors noted that over the preceding decades, financial market activity had increased so tremendously that the value of transactions was now seventy times greater than the size of the real global economy.
The signatories reminded European leaders that the primary, fundamental role of financial markets is to raise investment, allocate resources efficiently, and mitigate risk for the real economy. However, they warned that the vast majority of contemporary financial activity no longer contributed to these foundational goals. In particular, the letter fiercely criticised the rise of computer-driven, high-frequency trading. These algorithmic systems, designed solely to extract very short-term profits, were condemned by the professionals for misallocating global resources and actively draining liquidity from stressed markets exactly when it is needed the most.
Addressing the Scepticism: Growth and the Brexit Threat
Anticipating the standard objections deployed by financial lobbyists, the fifty-two professionals systematically dismantled the arguments used to stall the European negotiations. Addressing the persistent myth that a transaction tax would damage economic growth, the signatories pointed to a growing body of evidence proving the exact opposite. By deliberately reducing market volatility, adding long-term stability, and raising much-needed public revenue, the overall macroeconomic effect of the tax would be significantly positive.
The letter also directly tackled the opportunistic argument that the United Kingdom's recent vote to exit the European Union was a valid reason to delay or suspend the tax. Lobbyists had wrongly claimed that introducing the levy would drive European finance firms to relocate to a post-Brexit London. Speaking directly as industry professionals, the signatories assured European leaders that financial firms base their complex relocation decisions on a multitude of structural factors far beyond a small transaction tax. They further highlighted the irony of this threat by pointing out that the United Kingdom already successfully applied a highly lucrative stamp duty on stock trades.
To reinforce this point, the letter emphasised the proven, global track record of the policy. The signatories reminded the ten European leaders that deep, fast-growing financial markets in the United Kingdom, South Africa, Hong Kong, Singapore, Switzerland, and India all currently operated highly successful transaction taxes on particular asset classes, reliably raising billions of dollars every year without causing capital flight.
Why It Mattered: Solidarity and Sector Reform
The 2017 Financiers Letter remains a watershed moment in the campaign for financial reform, proving that the demand for a Robin Hood Tax was not merely an external political pressure, but a necessary market correction recognised by leading experts within the sector itself. Notable signatories included Lord Adair Turner, the former Chairman of the United Kingdom Financial Services Authority; Avinash Persaud, former head of Currency and Commodity Research at JP Morgan; and prominent academics such as Professor Stephany Griffith-Jones.
The letter concluded with a powerful moral and economic imperative. The signatories declared that the introduction of additional Financial Transaction Taxes by the ten European nations offered a profound opportunity to restore the financial sector to its proper, socially useful role. Crucially, they reminded leaders that the substantial revenues generated must be directed toward those in the most urgent need, both at home and across the world's poorest countries.
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