The short answer is no. As the IMF says, financial transaction taxes (FTTs) “do not automatically drive out financial activity to an unacceptable extent”.

FTTs can be designed so that they are very difficult to avoid. The best example of this is in the UK, where we have a stamp duty of 0.5% on all share transactions.  The UK’s major competitors do not have this and there certainly is no global agreement, yet it is a successful FTT that raises around £3 billion pounds each year. It is designed so it can’t be avoided and London remains one of the biggest stock markets in the world.

There are many reasons banks would not leave the UK, not least that they need a big enough government that they know will bail them out if things go wrong. There are not many governments with the ability or willingness to provide this implicit guarantee, certainly not the Cayman Islands or even Switzerland.

Time zones are critical for financial transactions, with London being ideally situated between Asian and US markets. This means that banks and other financial institutions cannot all move to New York as a major financial centre will still be needed in Europe. Germany, the main competitor in the European time zone is already committed to implementing an FTT.

The highly automated and centralised nature of many financial transactions makes an FTT very hard to avoid, and easy to collect. In recent years, FTTs have been introduced very effectively in more than 40 countries around the world.