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
Date Written: November 21, 2017
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: Suggested Citation