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The shadow financial system

  • 27-07-2012 5:26pm
    #1
    Be like Nutella
    Registered Users, Registered Users 2 Posts: 1,830 ✭✭✭


    "Bailed-out banks facilitate $21tn offshore cash hoard"

    was the headline... which made me read this article on the website of the Bureau of Investigative Journlism and this report by Investigative Economist James Henry.

    http://www.taxjustice.net/cms/upload/pdf/Price_of_Offshore_Revisited_120722.pdf

    James S. Henry is an economist, lawyer and investigative journalist, and former chief economist at McKinsey & Co. His is an Edward R. Murrow Fellow at Tufts University's Fletcher School of Law and Diplomacy and INSPIRE Fellow at its Institute for Global Leadership.
    _________________________________________________________________

    Investigative economist James Henry exhaustively trawled through financial information held by the IMF, World Bank, Bank for International Settlements, central banks and national treasuries to come up with the most definitive report ever written on the super-rich and offshore wealth.

    Henry’s Price of Offshore Revisted report, commissioned by Tax Justice Network, shows:

    - between $21 trillion and $32 trillion of financial assets is owned by High Net Worth Individuals in tax havens. This does not include real estate, art or jewels.

    - a conservative 3% return on that $21tn taxed at 30% would generate $189bn – a figure easily eclipsing what OECD industrialised nations spend on overseas development aid.

    - the top 50 private banks collectively managed more than $12.1tn in cross-border invested assets for private clients, including their trusts. This is up from $5.4tn in 2005.

    - fewer than 10 million members of the global super-rich have amassed a $21tn offshore fortune. Of these, less than 100,000 people worldwide own $9.8tn of wealth held offshore.

    ........ full article here

    http://www.thebureauinvestigates.com/2012/07/23/opinion-bailed-out-banks-facilitate-the-21-trillion-super-rich-offshore-cash-hoard/



    My question, for any economists out there, is if Tax Evasion, such as is documented in this report, has been a reality for centuries is on SUCH A MASSIVE and previously unestimated scale.. then can/should we assume that it has played a vital role in the enrichment of the world as a whole or the Western World as a whole? What I mean is, IF it has been a solid pillar of the worlds economy for so long and surely for the last century then who are we to say that instantly changing this reality will have necessarily a positive global effect? It's a complex subject for sure but I'd love to hear the opinions of those more educated than I on the subject because IF this report can be trusted and it seems that it can from what I can garner than the figures involved just blow my mind completely and change the way I view the worlds financial system and make this 'SHADOW FINANCIAL SYSTEM' something of an elephant in the room.

    Any Views?


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