Banks Defy Gravity
43 Pages Posted: 5 Jun 2018 Last revised: 28 Jun 2018
Date Written: June 18, 2018
Abstract
This paper provides the first quantitative assessment of the contribution of global banks in intermediating tax evasion. Applying gravity equations on a unique regulatory dataset based on comprehensive individual country-by-country reporting from all the Systemically Important Institutions in the European Union, we find that: 1) Tax havens generate an 200% extra presence of foreign banks; 2) The favorite destinations of tax evasion intermediated by European banks are Luxembourg and Monaco 3) British and German banks display the most aggressive stratégies in tax havens ; 4) New transparency requirements imposed in 2015 have not changed European banks commercial presence in tax havens; 5) Banks intermediate Eur 550 billion of off-shore assets, that is 5% of their origin countries' GDP;
Keywords: tax haven, international banking
JEL Classification: F34, F23, G21, H22, H32
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