These people are crazy you know

We do, of course, believe in free speech around here. However, that also includes the right to point out when one thinks that someone is wrong. Or misguided, or off dancing with the fairies or possibly just even crazy. And so it is with this group, Transforming Finance. They've just released their suggestions for how the financial and banking markets might be improved in the UK. Two of which seem worthy of note. The first being this:

DIVERSITY Ensure the new Competition and Markets Authority investigation into retail banking is tasked to specifically promote greater diversity in the finance sector including more mutuals, local banks, credit unions, peer to peer finance, community finance institutions and opening up the payment system.

We believe that this means more Crystal Methodists should be allowed to run banks. Amusing but possibly not quite what would constitute good public policy. However, this is simply crazed lunacy:

RESPONSIBILITY The UK should immediately sign up to the European Financial Transaction Tax, in order to help reduce some of the unnecessary speculative trading of financial assets. The dominant culture of short termism in financial markets is one of the root causes behind the misallocation of capital, whether it is overvaluation of fossil fuel stocks, periodic asset and property price bubbles or instability caused by high frequency trading. Given the City of London’s dominant position in European markets, participation of the UK in the FTT would make it a more effective global policy and give confidence to other markets such as the US to introduce similar measures. The FTT would also be in the interests of pension investors, as it would mean more attention paid by asset managers to long term prospects of their holdings and reduce costly, often hidden, fees for excessive trading.

The one and only peer reviewed academic paper by your humble author is on this very subject. The desirability or not of the FTT. And one of the points made in that paper is that the incidence of such a transactions tax (as it is with Stamp Duty on share purchases, a finding from the IFS) is upon pensions and pensioners. A transactions tax on investing reduces the returns to investing and thus to lower pensions for pensioners. So our mad gabblers are in fact proposing a tax which would reduce pensions as a way of increasing pensions.

They're mad, crazed or, to be fair about it, simply ignorant.