Financial transaction tax could raise energy company hedging costs
FTT will increase hedging costs for energy companies and deter them from trading with financial counterparties, firms say
A proposed European financial transaction tax (FTT) will raise costs for energy firms attempting to hedge their exposures and could push companies towards using more opaque bilateral deals, warn lawyers and market participants.
On February 14, the European Commission adopted a plan to enact an FTT across 11 European Union (EU) countries. The countries chose to co-ordinate their efforts using a process known as 'enhanced co-operation', after it became clear that broader agreement on an original
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