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A Step Change in Tax Transparency? An Event Study on How the Automatic Exchange of Information Did Not Affect Swiss Banks

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  • Tim B.M. Stolper

Abstract

For decades the Swiss banking secrecy has made it a criminal act for banks in Switzerland to reveal information about their customers' identities. As of 2018, Switzerland will exchange banking information on foreign bank customers with the respective home countries on an automatic basis. This event study estimates the abnormal returns in the stock prices of Swiss banks around important milestones toward the automatic exchange of information. There is no evidence of significant or sizeable decreases in the market value of Swiss banks due to the new tax transparency. The minimum detectable e¤ect sizes are moderate and suggest a high statistical power. The null results stand in reasonable contrast to a significant increase in the level of tax compliance among the owners of Swiss bank accounts.

Suggested Citation

  • Tim B.M. Stolper, 2017. "A Step Change in Tax Transparency? An Event Study on How the Automatic Exchange of Information Did Not Affect Swiss Banks," Working Papers tax-mpg-rps-2017-10, Max Planck Institute for Tax Law and Public Finance.
    • Handle: RePEc:mpi:wpaper:tax-mpg-rps-2017-10
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    References listed on IDEAS

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    1. Johannesen, Niels, 2014. "Tax evasion and Swiss bank deposits," Journal of Public Economics, Elsevier, vol. 111(C), pages 46-62.
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    5. Niels Johannesen & Tim B.M. Stolper, 2017. "The Deterrence Effect of Whistleblowing – An Event Study of Leaked Customer Information from Banks in Tax Havens," Working Papers tax-mpg-rps-2017-04_2, Max Planck Institute for Tax Law and Public Finance.
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    Cited by:

    1. Niels Johannesen & Tim Stolper, 2017. "The Deterrence Effect of Whistleblowing: An Event Study of Leaked Customer Information from Banks in Tax Havens," CESifo Working Paper Series 6784, CESifo.
    2. Niels Johannesen & Tim B.M. Stolper, 2021. "The Deterrence Effect of Whistleblowing," Journal of Law and Economics, University of Chicago Press, vol. 64(4), pages 821-855.
    3. Niels Johannesen & Tim B.M. Stolper, 2017. "The Deterrence Effect of Whistleblowing – An Event Study of Leaked Customer Information from Banks in Tax Havens," Working Papers tax-mpg-rps-2017-04_2, Max Planck Institute for Tax Law and Public Finance.

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    More about this item

    Keywords

    automatic exchange of information; banking secrecy; tax evasion;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law

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