US financial industry frets over Europe eyeing financial trade tax

The U.S. financial industry is growing increasingly concerned that a European push to establish a tax on financial transactions could end up on American shores.

The group of investment and business lobbies warned Treasury Secretary Timothy Geithner on Tuesday that while they appreciated the Obama administration's "sensible" opposition to such a tax, a growing movement in Europe to impose one could throw fragile markets off kilter.

"Global markets remain in a fragile state with many economies experiencing historic levels of unemployment and unusually slow recoveries," they wrote. "Now is not the time to experiment with policies that experience tells us will impede growth, fragment markets, increase market volatility, destroy savings and encourage uneconomic tax-motivated decisionmaking."

The letter was signed by the Securities Industry and Financial Markets Association, the Financial Services Roundtable, the U.S. Chamber of Commerce and the Investment Company Institute.

Attempts to impose a tax on all financial transactions in the U.S. have been pushed by some Democratic lawmakers, but have garnered little attention.

But the groups said they have a growing concern that certain European nations might try to impose such a global tax unilaterally. They noted that 11 European Union members have supported establishing a regional transaction tax that would be extraterritorial, allowing the collection of taxes on markets and traders that have "little or no connection" to those nations, including in the U.S.

The groups called on the administration to pressure European nations on that policy, and make clear it continues to oppose the tax.

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