"Ethical" forex broker calls for currency levy

LONDON, Aug 27 (Reuters) - A new British foreign exchange broker on Thursday urged peers to help raise billions of pounds for charity as it vowed to donate part of each transaction to fight AIDS, tuberculosis and malaria.
Ethical Currency's call comes as UK financial regulators raise the spectre of taxing financial transactions to help curb excessive banker pay, after the near collapse of the global financial industry last October, and G20 finance ministers prepare to meet in London next week. [nLQ42626] [nLR615953]
Inspired by the late Nobel prize-winning U.S. economist James Tobin, who called for a tax on financial flows to pay for development, Ethical Currency said it would voluntarily donate 0.005 percent of all deals to charity.
"Ethical Currency has effectively adopted the tax voluntarily, but the organisation's founders believe that it should be introduced as a Currency Transaction Levy," said foreign exchange trader and founder Alastair Constance.
"Campaigners have estimated that a tax levied at 0.005 percent would raise up to 35 billion pounds ($57 billion) a year -- enough to enable the G7 countries to meet their commitment at the Gleneagles summit in 2005 to double global aid."
Critics of such levies on transactions argue that without global agreement and coordination, money will simply move to economies that do not impose any.
"We expect governments to initially face major resistance from the financial sector, but over time, it would barely be noticed," said Constance.
Ethical Currency is not alone in donating to charity. Activist hedge fund The Children's Investment Fund (TCI), part of an industry that faces widespread criticism for its role in short-selling banking shares, pay hundreds of millions of pounds to its childrens' charity. (Reporting by Kirstin Ridley; Editing by Rupert Winchester)