Do Banks Aid and Abet Asset Concealment: Evidence from the Panama Papers

62 Pages Posted: 9 Sep 2016 Last revised: 17 Nov 2017

See all articles by James D. Omartian

James D. Omartian

University of Michigan - Ross School of Business

Date Written: October 23, 2017

Abstract

Using new data from the Panama Papers, I find investors and banks undermine regulation clamping down on foreign tax evasion by establishing opaque legal structures in tax havens. However, this concealment strategy is only effective when investors view their offshore bank as a reliable evasion partner. When they believe offshore banks will violate their trust and cooperate with the tax authorities, investors make fewer incorporations and increase closures of offshore entities. My study provides a rare direct look at investors' and banks' actions taken to increase opacity and informs debate on international cooperation to combat offshore tax evasion.

Keywords: Panama Papers, Tax Havens, Offshore Financial Centers, Shell Corporations, Tax Evasion, FATCA

JEL Classification: G28, H26, F55

Suggested Citation

Omartian, James D., Do Banks Aid and Abet Asset Concealment: Evidence from the Panama Papers (October 23, 2017). Available at SSRN: https://ssrn.com/abstract=2836635 or http://dx.doi.org/10.2139/ssrn.2836635

James D. Omartian (Contact Author)

University of Michigan - Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI 48109-1234
United States

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