The End of Bank Secrecy? An Evaluation of the G20 Tax Haven Crackdown

TY - JOUR

T1 - The End of Bank Secrecy?

T2 - An Evaluation of the G20 Tax Haven Crackdown

AU - Johannesen, Niels

AU - Zucman, Gabriel

N1 - Jel Classification: G21, G28, H26, H87, K34

PY - 2014

Y1 - 2014

N2 - During the financial crisis, G20 countries compelled tax havens to sign bilateral treaties providing for exchange of bank information. Policymakers have celebrated this global initiative as the end of bank secrecy. Exploiting a unique panel dataset, our study is the first attempt to assess how the treaties affected bank deposits in tax havens. Rather than repatriating funds, our results suggest that tax evaders shifted deposits to havens not covered by a treaty with their home country. The crackdown thus caused a relocation of deposits at the benefit of the least compliant havens. We discuss the policy implications of these findings.

AB - During the financial crisis, G20 countries compelled tax havens to sign bilateral treaties providing for exchange of bank information. Policymakers have celebrated this global initiative as the end of bank secrecy. Exploiting a unique panel dataset, our study is the first attempt to assess how the treaties affected bank deposits in tax havens. Rather than repatriating funds, our results suggest that tax evaders shifted deposits to havens not covered by a treaty with their home country. The crackdown thus caused a relocation of deposits at the benefit of the least compliant havens. We discuss the policy implications of these findings.

U2 - 10.1257/pol.6.1.65

DO - 10.1257/pol.6.1.65

M3 - Journal article

SN - 1945-7731

VL - 6

SP - 65

EP - 91

JO - American Economic Journal: Economic Policy

JF - American Economic Journal: Economic Policy

IS - 1

ER -