The author has undertaken a big task with this book. But the task is well worthy of examination as it is so vital to the shadowy infrastructure of the global financial system. To use the term that the author himself uses throughout the book - the role of "offshore" in finance - has been hugely overlooked in mainstream academic literature on finance and economics and also hardly ever mentioned in the mainstream media. During the 2007/2008 near meltdown, analysts referred sometimes to the importance of the "shadow banking system" and too often the inability to articulate more exactly what constitutes that system left most people none the wiser as to what was involved and how critical this element is to systemic risk. Nicholas Shaxson provides an easily digestible overview of the labyrinthine nature of the world of offshore finance and it is, as he suggests, ubiquitous. From its origins in the UK and the development of the euro markets in the 1960's (not to be confused with the EZ single currency - which came much later), he illustrates how the elaborate structures which have been put in place, have enabled wealthy individuals and corporations to avoid - no more precisely evade - massive amounts of taxes in the principal tax jurisdictions by concealing much of the net income in tax havens.
The dynamics of regulatory arbitrage are explained well, and as the author suggests the financial services industry and major banks have effectively captured the policy makers in the major economies and spurred them into a race to see which onshore jurisdiction can provide the most favorable "cover" and opacity to its corporate citizens. The thinking goes that by turning a blind eye and a nod and a wink here and there, the most favorable climate for offshore tax planning will at least contribute some trickle down benefits to the GDP in the "host" nations which still maintain some concept of domicility with respect to their corporate organizations.
The real issue which the author addresses in a slightly indirect manner has to do with the "ethics" of offshore. With public balance sheets in most of the G10 nations in a shambles and growing complaints from the "little people" in those jurisdictions as to their tax burdens, it seems likely that there can only be greater sympathy with the leading edge of civil protest about the injustice of current…
About the Author
Clive Corcoran
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