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A step too far? The European financial transactions tax on shadow banking

Gabor, Daniela



This paper focuses on the European Commission's proposals to include the repo market – a market systemic to European (shadow) banking – in the financial transactions tax (FTT). It asks why the FTT governments negotiating under the enhanced co-operation procedure quickly removed the repo market from the scope of the FTT. It argues that the European repo market, rather than a shadow market energized by regulatory arbitrage, as it is customary to portray it, grew out of a public–private joint venture before the crisis. Thus, regulators became deeply embedded – through their government bond markets and policy frameworks – in (repo) market-based finance. This convergence in public and private interests creates new trade-offs and ambiguous preferences that allow private finance to successfully mobilize resistance to reform, creating coalitions with public actors such as the European Central Bank.


Gabor, D. (2016). A step too far? The European financial transactions tax on shadow banking. Journal of European Public Policy, 23(6), 925-945.

Journal Article Type Article
Online Publication Date Sep 11, 2015
Publication Date Jul 1, 2016
Journal Journal of European Public Policy
Print ISSN 1350-1763
Electronic ISSN 1466-4429
Publisher Taylor & Francis (Routledge)
Peer Reviewed Peer Reviewed
Volume 23
Issue 6
Pages 925-945
Keywords Collateral, European Central Bank, financial transactions tax, repo markets, liquidity, shadow banking
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