Sarkozy announced the intention to proceed with some form of transaction tax. The details are sketchy at this point – what trades do they apply to? What jurisdictions would be covered? Etc. He did seem to once again focus on derivatives and CDS. The fact that there is a buyer and a seller of CDS still seems to elude him. The ” speculator” who sells CDS at stupidly tight levels is just as speculative as the person trying to go short.
Anyways we will have to see details to figure out any potential impact and who knows when we will see those. It may be that this is just a ploy to win voters over and push PSI negotiations and no details will ever be forthcoming.
It s somewhat ironic that he seems focused on derivatives when the one think senior French bankers will tell you is that they are incredibly smart and are the best at derivatives.
If some of the numbers are real and apply to any transactions conducted with French banks or in France – the financial system there would shrink quickly – so if and when anything concrete is proposed it will be watered down significantly.