The warped logic of the private banking industry is revealed in this piece, from SwissInfo:
Switzerland should be doing more to fight its corner in the battle for a piece of the shifting but highly lucrative tax evasion market, an expert tells swissinfo.ch.
With the market now worth an estimated $13.7 trillion (SFr13 trillion), Swiss financial journalist Myret Zaki asks in her new book, Banking Secrecy is Dead, Long Live Tax Evasion (Le secret bancaire est mort, vive l’?©vasion fiscale), who is really benefitting most from tax evasion.
Her conclusion: British jurisdictions, where trusts are thriving. These secretive organisations are, in Zaki’s words, the "princely tools" of tax avoidance.The non-governmental organisation Tax Justice Network valued the tax evasion market at $11.5 trillion in 2005, and at its current worth it comes in just under the United States’ Gross Domestic Product.
Activity in the Swiss financial centre is marginal by comparison. In 2008 it managed around SFr2.2 trillion in cross-border private assets, around half of which would have been undeclared.
Zaki argues that Switzerland should resist moralistic anti-banking secrecy arguments put forward by neighbouring countries and demand equal treatment. It should not give up too much, too quickly in the face of international pressure, she says.
Odd to find data I helped prepare being used as an argument for the supply of more tax evasion, but let's leave that aside and note the important issues. First, an acknowledgement that half of all Swiss banking funds are illicit. Second, a candid acknowledgement that banks know this and want to profit from it.
This is the madness of libertarian economics. We won't resolve the issue until banking, and more besides, is radically reformed.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
A gem of a link! Nice find.
Hello Mr. Murphy, I am Myret Zaki, the author of the book cited by Swissinfo.
You haven’t read my book. And what a mess. Got me so wrong. No, it’s not about defending the Swiss private banking industry (I am no spokesperson for the banking sector, but a journalist known as critical). And no one is using “your figures” to ask for “more tax evasion”.
The book identifies a problem of double standards: Anglo-saxon jurisdictions have kept their secrecy practices intact, and are controlling the tax evasion market, while singling out Switzerland (and its banking secrecy) as the sole culprit for tax evasion. See what I mean? Sure you do. If banking secrecy has to go, trust and corporate secrecy should go too. But we’re far, very far, from there.
By the way, I always appreciated to read your blogs(and Mr. Christensen’s as well) and very much shared your views about these issues. So I am very surprised by your reaction at my writings, which actually say nothing different (except maybe that I am not British and still dare criticize the Crown and Uncle Sam altogether).
Hum… last thing: the “acknowledgement” that half foreign private assets in Swiss banks are undeclared is nothing to jump to the ceiling about (no offense meant). It is a widely known estimate made by KPMG and other analysts. Hope it also shocks you as much when you hear estimates of several trillions of Latin American money being hidden in Miami, Delaware or Nevada?
As to your observation that it is “candidly” aknowledged that “banks know this and want to profit from it”, I will consider it as a joke.
@Myret Zaki
I’m sorry: I disagree with your hypothesis. I see no double standard. The UK is taking action on its tax havens. It has told them they’re not EU compliant. It has withdrawn a subsidy from the Isle of Man. It has taken over the Turks & Caicos. It has been belligerent with Cayman. And more.
Yes it can do a lot more – and I argue for it. Trusts and corporate secrecy must go – but to argue for a level playing field before action is an excuse for inaction and that is quite unacceptable.
As for Delaware et al – just look at what we’ve said on them. No one can have done more of late to highlight the issue.
But we argue for a genuine level playing field – and I’m sorry your arguments just don’t stack that there is bias against Switzerland. | there is action being required of all – and I think it is happening – I just wish it was happening faster
Richard
Thank you Richard. You definitely get full credit for having highlighted those issues for a long time and argued that there was a lot left to do. And you’re right that action is being required of all jurisdictions. But will things move elsewhere, beyond Switzerland? You seem confident they will. Time will tell if there’s ever going to be any exchange of information on trusts.
Myret
Myret
I reckon I have thirty years of likely campaigning left in me
I sincerely hope to have won this one well before then
We need registers of trusts and full accounts and ownership data on public record
It’s an issue we hope to make progress on again later this year
Best
Richard