Back to all announcements

ECB will raise concerns if trading tax damages financial markets

The European Central Bank (ECB) will make its concerns known if governments across the continent cause distortions in European financial markets by imposing tax on financial transactions, according to executive board member Benoit Coeure.

Reuters reports the ECB has no objections to the plans that are in place but Mr Coeure said it would "stand ready to engage governments to discuss alternative measures" should distortion occur.

Germany and ten other European Union member states have agreed a tax on trading in financial markets, which they hope to launch in January 2014 in order to cover at least part of the overall cost of the financial crisis.

Mr Coeure has said the tax does have potential benefits and last month claimed the ECB was willing to offer help in setting it up to ensure the levy did not upset the stability of the financial markets.

Bundesbank president and ECB governing council member Jens Weidmann have both raised concerns the tax could impair the market for repurchase agreements.

By Claire Archer