A tax on financial transactions could raise in excess of $850bn per year although it was likely to fail in its purpose of providing greater stability by increasing, rather than reducing, volatility in the markets.

In a report published by the global charity Institute of Development Studies, co-authors Neil McCulloch and Grazia Pacillo concluded that while the proposed levy, known as a Tobin tax, could increase volatility, the potential tax revenues outweighed the relatively small rise.