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

  • Niels Johannesen

    (Department of Economics - University of Copenhagen - University of Copenhagen)

  • Gabriel Zucman

    (PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics)

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.

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Paper provided by HAL in its series PSE Working Papers with number halshs-00665054.

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Date of creation: Feb 2012
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Handle: RePEc:hal:psewpa:halshs-00665054
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