Problem
Non-accountability of offshore banks
Other Names:
Evasion of financial regulations by banks in tax havensUnregulated banks
Nature:
Banks which set up their head offices in tax havens or in countries where regulation is inadequate are coming increasingly under scrutiny. Whilst they operate legally and currently without suffering adverse consequences, the global banking sector is concerned that they should provide minimum adequate information to ensure they meet adequate regulatory standards.
Incidence:
The collapse of the Bank of Credit and Commerce International (BCCI) in 1991 following charges of widespread fraud, froze some $20 billion in deposits in 69 countries.
Swiss banks handle one-third of global offshore private banking, which is estimated to contribute to half of their profits.
Broader Problems:
Legal havensEvasion of the lawAbuse of economic powerUnethical financial practicesUnaccountability of international financial institutions Related Problems:
Misuse of free production zones and export enclavesIneffectual national regulations for financial institutions Aggravates:
Bank fraudBank failureMoney launderingAbuse of tax havensBanking law violationsAbuse of banking secrecyUnethical banking practicesSpeculative flight of capitalProtectionism in free-zone international financial services Strategies:
Maintaining banking secrecy Subject(s):
Commerce → BankingCommerce → Finance
Commerce → Taxation
Geology → Land and coastal forms
Law → Regulation
Related UN Sustainable Development Goals:
Problem Type:
E: Emanations of other problems Date of last update
04.10.2020 – 22:48 CEST