The Deterrence Effect of Whistleblowing – An Event Study of Leaked Customer Information from Banks in Tax Havens

56 Pages Posted: 29 May 2017 Last revised: 23 Nov 2017

See all articles by Niels Johannesen

Niels Johannesen

University of Copenhagen

Tim Stolper

Max Planck Institute for Tax Law and Public Finance

Multiple version iconThere are 2 versions of this paper

Date Written: November 21, 2017

Abstract

We document that the first leak of customer information from a tax haven bank caused a significant decrease in the market value of Swiss banks known to be assisting with tax evasion and that the decrease was largest for the banks most strongly involved. These findings suggest that markets expected the leak to increase the perceived risk of committing and assisting with tax evasion and thus to lower both demand and supply in the market for criminal offshore banking services. This interpretation finds support in further evidence that the leak caused a sharp drop in foreign-owned deposits in tax havens.

Keywords: whistleblowing, economic crime, tax evasion, tax havens

JEL Classification: G21, H26, K42

Suggested Citation

Johannesen, Niels and Stolper, Tim, The Deterrence Effect of Whistleblowing – An Event Study of Leaked Customer Information from Banks in Tax Havens (November 21, 2017). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2017-4. Available at SSRN: https://ssrn.com/abstract=2976321 or http://dx.doi.org/10.2139/ssrn.2976321

Niels Johannesen

University of Copenhagen ( email )

Nørregade 10
Copenhagen, København DK-1165
Denmark

Tim Stolper (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

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