A Step Change in Tax Transparency? An Event Study on How the Automatic Exchange of Information Did Not Affect Swiss Banks

31 Pages Posted: 13 Dec 2017

See all articles by Tim Stolper

Tim Stolper

Max Planck Institute for Tax Law and Public Finance

Date Written: December 10, 2017

Abstract

For decades the Swiss banking secrecy has made it a criminal act for banks in Switzerland to reveal information about their customers' identities. As of 2018, Switzerland will exchange banking information on foreign bank customers with the respective home countries on an automatic basis. This event study estimates the abnormal returns in the stock prices of Swiss banks around important milestones toward the automatic exchange of information. There is no evidence of significant or sizeable decreases in the market value of Swiss banks due to the new tax transparency. The minimum detectable effect sizes are moderate and suggest a high statistical power. The null results stand in reasonable contrast to a significant increase in the level of tax compliance among the owners of Swiss bank accounts.

Keywords: automatic exchange of information, banking secrecy, tax evasion

JEL Classification: G21, G28, H26, K34

Suggested Citation

Stolper, Tim, A Step Change in Tax Transparency? An Event Study on How the Automatic Exchange of Information Did Not Affect Swiss Banks (December 10, 2017). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2017-10, Available at SSRN: https://ssrn.com/abstract=3086617 or http://dx.doi.org/10.2139/ssrn.3086617

Tim Stolper (Contact Author)

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

Marstallplatz 1
Munich, 80539
Germany

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