Researches from Institute of Economic Studies part of the fight against global financial secrecy

The Tax Justice Network, a UK-based non-profit organization, has published a new edition of the Financial Secrecy Index, which ranks countries based on how intensely the country’s legal and financial system allows foreign individuals and companies to hide and launder money extracted from around the world or to avoid taxation in their home country. Academic from Institute of Economic Studies, Miroslav Palanský, consults for the Tax Justice Network and has been involved in the creation of this year’s edition of the index.

The ranking has revealed the Cayman Islands, followed by the United States and Switzerland, as the world’s largest contributors to the problem of financial secrecy. The results show that overall, global financial transparency has improved by around 7 percent since 2018 when the last edition of the index was published, primarily in the area of international standards and cooperation. A recent IES working paper by researches, Petr Janský and Miroslav Palanský, analyzed how financial secrecy has developed over time.

The index has been published biennially since 2009 and the 2020 edition of the index is already its sixth edition. The aim of the index is to score each country’s legal and financial system with a secrecy score on a scale of 0 to 100, where zero means full transparency and 100 means full secrecy. The country’s secrecy score is then combined with the volume of financial activity conducted in the country by non-residents to calculate how much financial secrecy is supplied to the world by the country.

The Financial Secrecy Index has received widespread coverage in the press around the world (The Guardian, Financial Times, New York Times, Al Jazeera, Le Monde, Spiegel) as well as in Czech media (HN, Lidovky, Aktuálně.cz) and has been very influential in the debates around improving financial transparency, including automatic information exchange, beneficial ownership registers, and country-by-country reporting of multinational corporations. See the full results of the index here.

Autor - Mgr. Ema C. Stašová