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Swiss banks linked to $21-trillion tax fiddle

Malcolm Curtis · 23 Jul 2012, 12:02

Published: 23 Jul 2012 12:02 GMT+02:00

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The research was compiled by James Henry, former chief economist at consulting firm McKinsey, for the Tax Justice Network, a British campaign group.

Henry says Switzerland is among a group of secretive jurisdictions, such as the Cayman Islands, whose private banks have lured the world’s richest people to hide their wealth.

Details of his report, The Price of Offshore Revisited, were released online by British newspaper The Observer on Sunday.

The assets of the extremely high net worth individuals are “protected by a highly paid, industrious bevy of professional enablers in the banking, legal and accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy.”

The world’s top ten private banks, including Switzerland’s UBS and Credit Suisse, managed more than 6.2 trillion dollars in 2010, up from 2.3 trillion dollars just five years ago.

The massive tax evasion has “been going on for a very long time and governments haven’t been taking any action about this,” John Christensen, director of the Tax Justice Network, told World Radio Switzerland on Monday.

The amounts involved in the past few years though have risen dramatically to the point where they are now “threatening economic and social stability,” Christensen said.

Henry’s report compiles data from sources that include the Bank of International Settlements and the International Monetary Fund.

The report indicates that the cumulative value of the money that has flowed out of many developing countries since the 1970s would be more than sufficient to retire their debts to the rest of the world.

Christensen said tax codes globally are “riddled with loopholes” which are exploited by banks such as UBS and Credit Suisse.

These banks have made an industry out of helping wealthy people move their money offshore to avoid paying taxes, he said.

Malcolm Curtis (news@thelocal.ch)

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Your comments about this article

2012-07-23 18:51:48 by Global Macro
The report “The Price of Offshore Revisited” is false and misleading in several respects. The governments of the EU and the U.S. are engaged in a frontal attack on the right of privacy and individual liberty. On both sides of the Atlantic monstrously wasteful socialist governments are frantic to feed their voracious appetites for more and more of other people’s money. Refugees are trying to protect their savings from confiscation by increasingly tyrannical governments. This is sadly reminiscent of another time when Swiss banking was under attack. It is ironical that 1934 saw the dawn of Swiss bank secrecy laws during the emergence of several oppressive regimes, and in recent years we have seen the sunset of Swiss bank secrecy laws during a period of emergence of new oppressive regimes. It is shameful that Switzerland has found it necessary to surrender to the threats of these corrupt regimes. The statement that “they are now threatening economic and social stability” is utter nonsense. The governments of Europe and the U.S. are drawing enormous resources away from their economies. They are strangling the private sector by diverting resources that could be used for investment, and squandering them on terribly wasteful government programs. There is no amount of money that would ever be adequate to satisfy their demands. Leftist governments have an amazing talent for making vast sums of money simply disappear. No one can account for the huge sums that have been squandered already. The money is just gone. And gone also is the potential for their economies to recover. The people you are complaining about are not tax evaders; they are refugees.
2012-07-25 01:34:35 by HoppSuisse
Well said Global Macro
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