6 Oct 2012

BIS Transaction Data for 2011 : Over $9 quadrillion in financial transactions

The Eurozone may be about to collapse and governments may be queuing up to impose intolerable levels of austerity on their citizens, but the financial world is still going strong.

The Bank for International Settlements has just released its preliminary "Statistics on payment, clearing and settlements in the CPSS countries" for 2011. You can download the tables from the BIS website here.

You have a choice between a 575 page pdf file,  an Excel file with the data for each of the 23 countries (2 Megabytes of data sheets) or alternatively comparative tables in Excel forma.

It's quite hard work going through all that data, because they don't bother combining the data to make it easy to work out what the totals are. But as in the last two years, I have put the numbers together to get some overall numbers.

Here is the break down using the various tables in the comparative tables, showing the totals for the last five years. The column called "Source" refers to the place in the BIS dataset where I got the numbers.

As you can seen, it was 2007-8 where the numbers were highest, with more than $10.5 quadrillion in transactions in 2008. The numbers dropped in 2009 and 2010, but they are coming back up again with over $9 quadrillion in 2011. Note that the numbers are clearly underestimates - the numbers refer to payments and trades using "selected" interbank transfer systems and exchanges.

I've also done the figures separately for the 23 countries - the totals aren't quite identical - I'm not quite sure why. But what's $10 billion of error when you you are talking about numbers that are nearly 1000 times larger.

As last year, I am annoyed to see that numbers for the UK are clearly massively underestimated (which is why they are in red). This is essentially due to the fact that both the London Stock Exchange and LCH.Clearnet Ltd have failed (yet again) to supply their numbers to the BIS. I think we can safely add several hundred billion extra there.  Indeed, my own calculations put the level of transactions in the UK at something like £1760 billion a year. And Australia is another place where a lot of the figures are "nav" (Not available). -

The conclusion from all this? Well, it is clear that with at least $9 quadrillion in transactions going on in just 23 countries (and well over $10 quadrillion if you include sensible numbers for the UK), it would not take much by way of a financial transaction tax to generate enough revenue to allow many governments to scrap conventional taxes altogether. It's the idea that I have been pushing for close on two years, and which I have explained in detail in my Youtube video called the "0-0-0-0.x Tax Reform Plan" - zero percent income tax, zero percent sales tax (VAT), zero percent tax on company profits (eg. corporation tax) and replace the lot with an FTT that in many cases would be a fraction of a percent.

And of course, the idea that there is no alternative to austerity is completely farcical. It really would be simple to get the financial sector to pay for the mess that it caused back in 2008. There can be no justification for making citizens carry the can for the financial sectors irresponsible behaviour.

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