Reference : Bank secrecy, illicit money and offshore financial centers
Scientific journals : Article
Business & economic sciences : Microeconomics
Business & economic sciences : Economic systems & public economics
http://hdl.handle.net/10993/12188
Bank secrecy, illicit money and offshore financial centers
English
Picard, Pierre M. mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
Pieretti, Patrice mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
Aug-2011
Journal of Public Economics
Elsevier Science
95
7-8
942-955
Yes (verified by ORBilu)
International
0047-2727
Lausanne
Switzerland
[en] money laundering ; offshore banking ; compliance
[en] International and national institutions regularly put pressure on offshore financial centers and their clients to enforce compliance with anti-money laundering regulations and that in spite of the existence of bank secrecy. This paper discusses the winners and losers of such policies. Surprisingly, aggregate profits and tax revenues can increase under those policies. In addition, we show that offshore banks can be encouraged to comply with rigorous monitoring of the investor's identity and the origin of his/her funds when the pressure creates sufficiently high risk of reputational harm to this investor. Nevertheless,
the efficient pressure policy is dichotomous in the sense that a social planner chooses zero pressure or the pressure that just entices offshore banks to comply. By contrast, the implementation of those pressure policies on an onshore institution may be inefficient. Finally, we show that deeper financial integration fosters compliance by the offshore center while it also gives better incentives for delegated organizations to effectively induce compliance.
Researchers ; Professionals ; Students
http://hdl.handle.net/10993/12188
also: http://hdl.handle.net/10993/12876
http://wwwfr.uni.lu/content/download/21973/267785/file/2008-18_Bank%20Secrecy,%20Illicit%20Money%20and%20Offshore%20Financial%20Centers.pdf

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