The markets interpret taxes as damage and will route capital flows around them. For example, if it is impossible to sell French securities more liquidly than a government imposed floor, sucks to own them, but with a team of engineers and billions on the line you can trivially create some instrument which proxies actually owning French stock, then trade that. For example, American Depository Receipts will move in virtual lockstep with the underlying stock but since they don't move he shares when they change hands they'd avoid the tax.

This involves more profit for middlemen than the more straightforward way. London and Wall Street thank you for your support.

Just who the h*ll do those politicians think will pay those taxes? Certainly not the banks. They'll just push the costs to their costumers, they have no choice anyway as all the banks will have to pay the taxes. France? The next domino to fall...

I was more or less convinced by Paul Willmott´s arguments on this one.