Jan 20 2011

Jersey finance responds to Treasure Islands

Geoff Cook of Jersey finance, of course, is defending Jersey after my Guardian extracts painting it in a rather unflattering light. It’s rather more polite and sophisticated than the cries of ‘imbecile’ emanating from the Cayman Islands, and it carries the headline ‘Well-run tax havens help, not hinder, the global economy.’

(This Geoff Cook article is a tad old, but I’ve only just found the time to attend to this.) The headline alone raises a big, and important set of arguments about tax havens: this is probably Item No. 1 that they routinely raise in their defence. The arguments are long and varied, and I address some of the main ones in my chapter “Resistance” and also, in a little more detail, on this website – here. I show why arguments like Cook’s are just downright wrong.

Regarding the specific elements in his comment piece, I’d first draw attention to this Tax Justice Network blog, which makes some useful points. It demonstrates that Jersey clearly is very secretive, and that notes the inflows have probably not done the United Kingdom a damn bit of good, once all things are considered.

Cook raises (predictably) a straw man argument:

“His emotive language dramatises a far more mundane, although vital, process: the Bank of England’s own figures show that at the end of September 2009, banks based in Jersey had lent institutions in the City of London more than $223bn, garnered from investors around the world.”

Well, call the language emotive if you will – but if Cook were to read the book, which he may have done by now, he will find that I discuss this exact issue as early as page 16:

“in the second quarter of 2009 the UK received net financing of US$332.5 billion just from its three Crown Dependencies [Jersey, Guernsey and the Isle of Man.] Jersey Finance promotional literature makes the point plainly. ‘Jersey,’ it says, ‘represents an extension of the City of London.’ “

All of which goes to support one of the central theses in the book. And all of which I explain, in great detail, to be harmful.

And as to the ‘white-list’ badges of squeaky-cleanliness handed out by the the IMF and the OECD – well, read Treasure Islands and understand how deeply, and horrifically implicated these organisations are – especially the OECD – in projecting an image of cleanliness while allowing dirty business to go on as usual. I will be returning to this theme soon.

But one of the main points of this post is to draw attention to the “arguments” page on this website. Once again, it’s here.

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