Dirty Money Coming Home: Capital Flows into and Out of Tax Havens
57 Pages Posted: 12 Jan 2018
Date Written: December 2017
We use newly released bilateral locational banking statistics of the Bank for International Settlements to show the full circle of international tax evasion via tax havens. Surprisingly, white-washed money from tax havens is also withdrawn from banks in non-havens if an information treaty is signed between both countries. There are time lags and other economically plausible structures in these reactions. Interestingly, the effect of additional information-uponrequest treaties seems to fade out over time. By contrast, new treaties based on automatic information exchange again show bite; this puzzling evidence is best explained by dirty money changing its packaging.
Keywords: Tax evasion, international capital flows, international information exchange treaties, bank deposits
JEL Classification: H26, F38
Suggested Citation: Suggested Citation