The Financial Times has an editorial on taxing banks this morning.  It is a pretty inadequate article.

Gordon Brown’s idea of a global financial levy received a raspberry when he floated it last autumn. But a prime minister who believes that he saved the financial world in 2008 is not easily deflected.

Mr Brown has never specified exactly what he had in mind. Last year, he talked of a new “social contract” between the bankers and society. A global levy on transactions was one way of achieving this, but he spelled out others, including an insurance fee to reflect systemic risk.

So far so good. But then it says:

While a Tobin tax-like transaction levy is a non-starter, insurance has something going for it.

No discussion on why. No argument. No analysis. Just “a Tobin tax-like transaction levy is a non-starter”. Insurance has, however, got something going for it, it says. Like what, one wonders? Particularly as the editorial concludes:

But if an insurance fee is practical, it represents only a partial solution to the question of bank reform. It is not clear that it could be introduced on a big enough scale to make a difference. Moreover, insurance is only one mechanism for dealing with reckless banks, and arguably the less important one. What is needed is to change behaviour in a way that makes banks safer. Insurance alone does not achieve this — we must regulate the risks that banks can take on and wind them down in extremis.

As a report to be published on Monday which I have authored shows, if we’re talking cash there is now doubt that financial transaction taxes can raise substantial cash — and yes, my work does address the issue of the incidence of the charges. Trust me, the issue of scale is not one from which financial transaction taxes, such as the Tobin tax, suffer.

And the other thing they do without doubt induce is change in behaviour: less trading is the obvious first such change. Reduced capacity to pay bonuses is another enormous benefit. Downward pressure on bank traders’ pay is a third. None if which, as the FT notes, will be induced by an insurance levy. Which makes a levy an outright failure in comparison using the FT’s own measure of success.

So why has the FT rejected financial transaction taxes? Could it be that they were writing of their own opinion when the editorial said in its final paragraph:

Mr Brown’s supporters now include the banks. A cynic would say that they have calculated that if they must concede something, insurance is the least-worst option. Mr Brown’s idea is interesting, but it must not become a substitute for real structural reform.

Could it be that the FT is secretly hoping that structural reform of the sort financial transaction taxes would precipitate will not happen? Is that the explanation for its dismissal of the idea? It’s hard to see what else is.