currency transfer<\/strong><\/a> services to clients worldwide<\/p>\nThe global financial crisis and the lower budget revenues of governments worldwide forced policy makers to unshelve the controversial idea of imposing a tax on financial transactions. Such a move will affect every single currency transfer around the globe and might well push customers to look for an alternative to banks and traditional banking.<\/p>\n
The proposed tax on financial transactions within the European Union (EU) will have an adverse impact on the fees banks charge their clients for currency transfers abroad and transfers between the EU and non-EU financial institutions, in particular. However, a recent meeting of EU financial leaders in Brussels failed to work out an agreeable road map on the subject, giving the entire financial world a breather.<\/p>\n
Imposing a tax on financial transactions is not a new idea and was in the air following the start of the global financial crisis. German Chancellor Angela Merkel and French President Nicolas Sarkozy are strong supporters of the tax on financial transactions while the U.K. and other EU and non-EU countries expressed doubts that such a tax would help bring cash to government coffers. According to U.K. Chancellor of the Exchequer George Osborne, nobody knows how such a tax will effectively work while other experts explain that the financial transaction tax will have a negative impact on every single currency transfer in the world.<\/p>\n
If the proposed tax is imposed within the EU, it will affect banks in two ways. First, share and bond purchases will be subject to taxation and, second, banks will have to pay additional taxes on profits and remuneration. Consequently, banks will be forced to raise the fees they charge for a currency transfer or other financial activities on their clients in order to compensate for the higher tax.<\/p>\n
On the other hand, banks are often reluctant to change and enterprising non-bank institutions rapidly fill the gap on the market of currency transfers. These companies respond more quickly and adequately to the global demand and supply of such services, while traditional banks often fail to leverage on the support, including financial, they receive from governments. The technical side of the proposal is less important, although many experts believe that the introduction of the new tax would require huge and extensive research into the technical details.<\/p>\n
The mere fact that such a discussion has been on the table for so long suggests that all stakeholders are a long way of reaching an agreement on the financial transaction tax. Customers, however, should look out for trouble stemming from the imposition of such taxes; namely, higher charges for currency and financial transactions, stricter financial regulations, which sometimes could prove an obstacle to business, as well as higher costs of moving money abroad.<\/p>\n
Reaching a final decision is in the hands of policy makers but average customers can prepare themselves for the future by discovering new means and possibilities to lower the costs of their currency transfers. A possible solution lies with existing non-bank institutions and newborn business models which can reduce the burden of a new tax on financial transactions worldwide.<\/p>\n","protected":false},"excerpt":{"rendered":"
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