Work detail

Financial Secrecy and Its Impact on Cross-Border Deposits

Author: Mgr. Daniel Džmuráň
Year: 2017 - summer
Leaders: Petr Janský Ph.D.
Work type: Finance, Financial Markets and Banking
Language: English
Pages: 85
Awards and prizes:
Abstract: The role of tax havens in the global issue of tax evasion has been illustrated by
numerous studies. In 2009, a major international initiative has been launched by G20
and OECD with a purpose to put an end to offshore tax evasion. Yet the outcomes of
this tax haven crackdown are often contested. This thesis brings new findings to the
empirical research that has been done on the field of crackdown’s evaluation. First, I
confirm the results of earlier academic papers and I find a negative impact of
information exchange treaties on the value of funds placed in tax havens. Second, I
extend the existing research shifting the attention to deposits in non-havens, concluding
that also the money from tax havens placed on non-havens’ bank accounts disappear
after signing a treaty. In the final part of the thesis, I – for the first time in literature –
link the data on cross-border deposits with a measure of financial secrecy. I find that a
decrease in secrecy score corresponds to a decline in deposits on a sample of all
countries and non-havens. All my findings suggest that weakening the financial
secrecy is associated with a significant outflow of cross-border deposits.


McKinsey & Company
Moneta Money Bank