Several key industry associations, including the BBA and the International Capital Markets Association (ICMA) have expressed concern over the impact of the Financial Transaction Tax (FTT). BBA has written to Mervyn King explaining how the perceived “low” rate of FTT ignores the cascading effect of the tax where transactions have several legs and no available exemptions. BBA believes the Commission has seriously underestimated the cascading effect of the tax, and has not properly taken into account its effects on market liquidity, the broader economic effect and the interplay with other key regulatory objectives. ICMA also stresses how the FTT would impact the movement of collateral which would create systemic risks and interrupt the flow of money between banks, to governments and to the real economy. (Source: BBA Writes on FTT and ICMA Writes on FTT)