Mar 22 2013

Treasure Island Trauma: Cyprus

Posted by: Nick Shaxson in: Thoughts

I do like the start to Paul Krugman’s latest New York Times column, which begins as follows:

“A couple of years ago, the journalist Nicholas Shaxson published a fascinating, chilling book titled “Treasure Islands,” which explained how international tax havens — which are also, as the author pointed out, “secrecy jurisdictions” where many rules don’t apply — undermine economies around the world. Not only do they bleed revenues from cash-strapped governments and enable corruption; they distort the flow of capital, helping to feed ever-bigger financial crises.”

I’ve had quite a few media calls on Cyprus in the past few days but I have turned them all down, largely because I’ve been travelling and in meetings all day. I’m still mulling what it all means though. Martin Wolf had an interesting piece on it, and Krugman has a very interesting follow-up article, among other things looking at the extent to whichnon-resident deposits are almost certainly larger than they would first appear.

I wonder if President Vladimir Putin might want to get some information out of secret Russian accounts and structures in Cyprus, as part of a price for helping out. To my surprise, though, the Financial Secrecy Index gives Cyprus a secrecy score of 58, which is pretty low when compared to places like Bermuda or the BVI or Dubai (it’s still not great, though.)

I would like to spend more time on this today but childcare responsiblities kick in in approx. 3 minutes and 40 seconds . . .

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