PARIS: French banks may be forced to move a large part of their operations abroad if France went ahead unilaterally with a proposed "Tobin" tax on financial transactions, the French Bank Federation said.
Describing such a tax as inefficient and counter-productive, the FBF said on Monday it would be a painful handicap for the French economy. It did not provide any numbers.
"Such a tax would by its nature push up the cost of financial transactions forcing, in part, providers to outsource a large part of the operations that are currently done in Paris to other financial centres," the FBF said.
French President Nicolas Sarkozy, who faces a steep climb to re-election this year, reiterated his support for such a tax on Monday and said France would have to set an example to get other countries to follow.
On Friday, financial lobby group Europlace whose members include French bank BNP Paribas, insurer AXA and the Bank of France also said a France-only Tobin tax would "inexorably" lead to a departure of such activities from Paris.
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