Money managers under the microscope
Gordon Brown is truly having a rough time. Rebuffed by the United States, International Monetary Fund and others for floating the idea of a tax on financial transactions at this weekend's G20 meeting, he has now got short shrift from the Cayman Islands.
McKeeva Bush, the veteran Caymanian politican who is now premier of the British Overseas Territory, popped in to the Reuters London headquarters for a chat this week. His main concern was to explain plans for making the islands an easier place for financial services personnel to live in. He would like some of those 8,000 hedge nearly 10,000 funds that are registered there to be more than just brass plaques. But, when asked, he also had time to dismiss the idea of a transaction tax out of hand.
"That's an old hat. I have been hearing about it for 25 years. It's just not practicable. It will not work."
And just in case the point was missed:
"We have looked at it and we do not think this is something that would work."
Bush would not be drawn on the idea that a tax on transactions could, metaphorically speaking, sink his Caribbean island homeland under the waves. But Paul Byles, a government financial services consultant who accompanied the premier, did touch on the liquid nature of the issue:
The unfolding crisis in British politics makes for fascinating viewing for the populace and great work for journalists, but it also of course has potentially far-reaching implications in the financial sector.
As cabinet ministers resign and Labour MPs call for Gordon Brown to step down, several outcomes now distrinctly possible — Brown stays, a new Labour prime minister emerges or a general election is called and (if polls are correct) the opposition Conservatives win. The future direction of UK government policy is far from clear.
Executives in London’s Mayfair, home of the UK’s multi-billion dollar hedge fund community, could be forgiven for a few raised eyebrows after British Prime Minister Gordon Brown’s call yesterday to outlaw shadow banking systems and offshore tax havens.
“You are also restructuring your banks. So are we.” he told U.S. Congress. ”But how much safer would everybody’s savings be if the whole world came together to outlaw shadown banking systems and offshore tax havens.”