The Issue Of Offshore Banking

Stakeholder – person, group or organization that has interest or concern in an organization (businessdictionary)

These are organisations or individuals with strong views that may influence the decisions of businesses and the government.

Now, many of these banking groups are owned by foreign investors, despite attempted safeguards. This ownership has provided investors leverage and influence over the actions of the government because the government owes an exorbitant amount to these banks (Daniel Lederman). The same argument can be made about the United States’ government. This influence can be seen across the board as many decisions now seem to favor only a select few, forgetting about the ramifications for the many.

Differences in banking regulations across borders permit the most efficient channeling of funds from lenders to borrowers, leading to increased investment and thus increased GDP. Therefore it is imperative that policy makers prudently evaluate the possible consequences and benefits of harmonized banking regulations, as demonstrated by similar regulations instituted domestically, before any such endeavor is embarked upon.

“Panama Papers: The Real Scandal Is What’s Legal” by Brooke Harrington was written on April 6th, 2016 and published in ‘The Atlantic’. In this article, Harrington stresses the idea that tax avoidance and offshore finances are entangled with the acts of many governments seeing that it is what stabilizes the economic growth of a country. The author discusses the link between the Panamanian wealth management firm Mossack Fonesca, to a numerous amount of financial crimes. The “Panama Papers” are documents that consist of firms who are allegedly involved in fraud, money laundering, and theft. No country would even think to create strict laws towards ending tax evasion because it would hurt several economies and firms like Mossack Fonesca whose

The fight against money laundering over the last two decades has become an increasingly important task. Although the idea of money laundering has historically been associated with the 1930s and gangsters such as Al Capone and Meyer Lansky, operating under the US Dry Regime, broad public use, the term acquired during the Watergate case investigation mid-70s . It is the law that defines money laundering as a crime that occurs in the 1980s. Since then, many initiatives have been developed and implemented to combat this criminal activity. When discussing the issue, one must take into account the most important economic change of the last few decades - the growing globalization of the world economy and especially the global capital market. Economies

Benjamin Franklin once famously said in his private correspondence, “…in this world nothing can be said to be certain, except death and taxes”. Benjamin Franklin was correct, taxation is inevitable, but the extent of taxation can be said to be close to nothing when banking offshore. Offshore banking has become a plague in America, crippling small business, enlarging the wallets of top corporations and keeping politicians afloat on a raft of “liquid money”. Not only is this “plague” very selective in its choice of victims, it directly affects the middle to low class, working American dramatically. Offshore banking extorts the basis of United States economics and regulation and should be illegal.

Also as previously stated, the rise of technology has made it easier for organized crime groups to ship their money and assets abroad in order to avoid declaring income and paying taxes. Technology has made it easier for these groups to evade taxes easier by creating false financial accounts and sending their money to tax havens (Masciandaro (2000). "The Illegal Sector, Money Laundering and the Legal Economy: A Macroeconomic Analysis". Journal of Financial Crime 8 (2).

Shadow Banking Zoltan Pozsar, Tobias Adrian, Adam Ashcraft, and Hayley Boesky Federal Reserve Bank of New York Staff Reports, no. 458 July 2010 JEL classification: G20, G28, G01

“Stakeholders (or interest groups) are tangible, visible and approachable groups or institutions which have a direct influence on the functioning of an organisation.”

participants in this conference created three organizations to help regulate the international economy. The first is the International Monetary Fund (IMF) which was established with the idea of regulating monetary policy. One of the benchmarks of the IMF is the stabilization of exchange rates and the loaning of money to help stabilize countries with balance of payments deficits. The second organization established was the General Agreement on Tariffs and Trade (GATT) whose main focus was on a liberal trading order.

This paper introduces Bernard L. Madoff a fraudster who orchestrated a multi-billion dollar Ponzi scheme. The paper discusses elements that make up a Ponzi scheme and explains what a Ponzi scheme is. The paper goes on to introduce some of the victim’s and examines some reasons why someone might fall victim to a Ponzi scheme. The paper describes the three elements making up the fraud triangle and how they relate to the fraud and the fraudster. This paper covers Bernard Madoff’s background and history and how he committed the fraud analyzing the fraud triangle. The paper describes ways to correct the issue, accounting principles violated, and recommendations for a fix. Finally, the paper looks at internal and external controls violated and ends with a conclusion.

In this essay I am going to discuss the effects of shadow banking on the recent financial crisis of 2007-8. Shadow banking was one of the major causes of the financial crisis since it was the subprime mortgages which was the first trigger of the collapse in the banking system. Through this essay I am to achieve a detailed analysis of why the shadow banking was one of the causes in the financial crisis and why was it not prevented by any regulation enforced. The basis of shadow banking system is that it occurs when financial intermediaries conduct transformation of maturity, credit and liquidity without having access to the central bank liquidity guarantees or even public sector credit. Maturity transformation: obtaining short-term funds to

Financial regulation is necessary and without an efficient set of regulations a country could see rises in unemployment, interest rates, and the deterioration of financial intermediaries. With the globalization of the financial industry, it becomes more and more common for businesses to seek financing outside of their county 's boarders. These innovations in the financial industry stress why it is so important for regulations to be created and changed to reduce risk and asymmetric information in financial systems.

Offshore banking is the action of having a bank account outside of the country of residence. Typically it offers many advantages like greater privacy, low or no taxation, easy access to deposits and protection against local, political, or financial instability, but has also been popular for its use of illegal practices like money laundering and tax evasion. Those against offshore banking view its illegal reputation and predict that it will only cause further damage like providing fund for terrorism or holding underground economies. However other experts believe that offshore banking is a safe haven for depositors and has had a substantial impact on the international economy in today’s world.