Fresh from lambasting Financial Services Authority boss Adair Turner for his observation that many multi-billion pound transactions in the City are devised just to enrich bankers - and thus “socially useless” -and therefore might be taxed, London mayor Boris Johnson is now entering the lists on behalf of hedge funds against the EU.
Hedge funds bet on anything that moves in the financial markets (which they’re perfectly entitled to do) but do not disclose their liquid assets or activities in the way that other finacial institutions are required to do.
Angela Merkel and Nicolas Sarkozy want them reined in as their bets with borrowed money can destabilise markets. The hedgies, largely based in London and New York, mutter than any more of this and they’ll all leg it to Switzerland, or the US.
The hedge funds’ trade association says that this would cost the UK government up to £10bn in lost tax revenue, money it can certainly do with at the moment.
This one will run and run. But wouldn’t it be nice if the aforementioned Association of Alternative Investment Managers could actually spell out how much tax its members pay and on what revenues?
Then this debate might start to generate more light than heat.