#x98;The#x9C; secret money market inside the dark world of tax evasion, financial fraud, insider trading, money laundering, and capital flight

Few aspects of international finance are more fascinating than secrecy. Images flash through the mind of suitcases crammed with currency crossing national boundaries, of close-mouthed couriers slipping easily into and out of airports, hotels and banking offices, of expatriates living handsomely along palm-shaded beaches with no visible means of support, of churning money laundries and quiet slush funds. All find their parallels in the real world. But there are many other, less dramatic but much more important images as well: the tax evader skimming unreported income into an offshore account; the briber shuffling funds to the bribee; the violator of securities laws squirreling away illegal profits; the insecure politician or government official building a retirement fund abroad; the businessman fleeing his creditors; the husband fleeing his wife; the law-abiding citizen fleeing exposure to political or economic risk. All are players in the global financial secrecy game. International financial secrecy is a subject of enduring and perhaps growing importance for the international economy, one that is well worth exploring. With a little imagination, the conventional tools of economic analysis can yield some useful insights into an otherwise rather murky subject. As we shall see, it is largely a matter of supply and demand. ‘The Secret Money Market is worthy Baedeker to the dark side of the world of finance. Walter provides a concise set of thumbnail studies of major scandals from the Bank of Boston’s cash laundromat to the Panamanian black hole down which Calvi’s Banco Ambrosiano poured roughly $1.4 billion. That alone makes it a good reference source. Here and there, too, are giant flashes of mordant wit. A ‘must read’ for tax cheats, con artists, drug backers, and cops.” —Institutional Investor “The term ‘secret money’ at once conjures up an image of a shady-looking man in a black hat and mirror shades moving carefully through an airport lobby, depositing a sealed case in a locker and posting the key to a person called Max. Waiter’s book covers the man in black, but as a serious academic study goes into mere conventional financial operators «as well. This book is a lucid and at times fascinating look at a little-investigated corner of the financial world.” —Accounting Age “This book is a gripping and impeccably researched international drama ...tax evasion, laundering, of ‘dirty? money and other moves in this market all add up to colossal movements in capital. The first thorough, professional, and detached examination of this market and the commodity in which it deals—secret money.” —Lloyd’s List Ingo Walter is the Charles Simon Professor of Applied Financial Economics at the Stern School of Business Administration, New York University. He also serves as Director of New York University Salomon Center. He has served as a consultant to various government agencies, banks, and corporations on international economic and financial problems Front cover Title page Copyright © 1990 Contents Tables, Figures and Exhibits Preface 1 The World of Secret Money The demand for financial secrecy The supply of financial secrecy The cost of secrecy The price of secrecy Market structure Plan of attack Note 2 What is Secret Money? The underground economy Internationalization of underground financial flows Secret money vehicles The problem of death Summary Notes 3 Demand for Secret Money: Capital Flight, Bribery and Corruption 4 Demand for Secret Money: Tax Evasion, Smuggling and Insider Trading Tax evasion Avoidance vs evasion Smuggling Violations of securities laws Notes 5 Demand for Secret Money: Fraud 6 Demand for Secret Money: Money laundering and undercover activities 7 Supply of Secret Money Elements of supply Patterns of secrecy supply Switzerland Notes 8 Global Secrecy Havens Caribbean and South Atlantic Channel Islands Gibraltar Luxembourg Panama Other havens United States Summary Notes 9 Combating International Financial Secrecy: Initiatives 10 Combating International Financial Secrecy; Patterns 11 Consequences Economic effects Political effects Social effects Personal effects Summary Notes 12 The Outlook Notes Annex 1. Theory of International Financial Secrecy Annex 2. Catalog of US Cases Involving Bank or Commercial Secrecy References About the author Back Cover Brings together more than 100 inside stories of the dark side of international finance. Explores the people, institutions, and governments that keep banking and other financial transactions secret and examines the consequences of financial secrecy in all of its economic, political, social and personal dimensions