For years, the “Tobin tax” – a tiny levy on cross-currency financial transactions – has been a roving solution in search of a problem. It has now found a friend in Lord Turner, chairman of the UK Financial Services Authority, who suggests that since the financial sector has become too big for Britain’s good, measures such as a Tobin tax might be needed to rein it in. This is a false note from a man whose reasoning on finance is otherwise generally sound.

James Tobin, the Nobel prize-winning economist, wanted a tax levied whenever one currency was exchanged for another. The idea was to protect countries’ ability to maintain different interest rates by “throwing sand in the wheels” of short-term currency speculation without putting an undue burden on trade.