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Investment International blog | 9
Weapons of tax
destruction?
Geoff Cook, Chief Executive of Jersey
Finance, robustly defends the island’s
regulatory regime
T
he recent G20 Preparatory Titanic sinks. Do they realise that the systemi- So why the linkage with ‘Tax Havens’?
Summit in Berlin has added fur- cally significant banks at the heart of this cri- Well, before I explain let’s lose the pejora-
ther to intense media specula- sis are the most regulated institutions we tive label. No one can define it meaningfully
tion over measures to be taken possess? Let us not be diverted from today’s and like many nasty nick names it is designed
against ‘Tax Havens’. priorities.” to conjure up negative images of wrongdoing
Mr Wolf is right and reveals a poor grasp and dodgy activity, and neatly sidesteps any
‘Tax Haven’ now competes with ‘Bank’ as amongst some commentators as to the causes sense of obligation to conduct an objective
the pejorative label of choice deployed by of the financial crisis, and the role of small examination of the facts.
politicians and journalists alike. international finance centres dubbed as ‘Tax The criticism is aimed at niche internation-
To a degree this is understandable given the Havens’. al finance centres (IFCs) and is usually fed to
dislocation to the global economy as a conse- the media and politicians by anti-business
quence of the financial crisis. But this doesn’t How did this happen? groups, opposed to tax competition and free
make it right. Clearly there is a continuing sense of moral markets in mobile international capital.
Following the EU leaders Summit, Martin outrage as countries slide into recession, Ironically these critics are inclined to attack
Wolf of the FT, widely regarded as one of the unemployment rises, and already strained globalisation, multinationals of all types, and
world’s leading financial journalists, proposed national budgets in the US and Europe come are the authors of the protectionist clamour
a speech for President Obama to deliver at the under intense pressure, as a result of the that the G20 has vowed to avoid, as the fol-
G20 London Summit on 2nd April. It includ- financial crisis. lowing quotation from the Berlin Summit
ed the following observation; The truth, however unpalatable, is that the evidences:
“First we must set priorities. I note with crisis has its roots anchored firmly in debt “All countries have a duty to resist
consternation Europeans’ obsession with reg- taken on in the major western deficit protectionist tendencies and to work
ulating hedge funds and tax havens. Did they economies. Debt became the rocket fuel of towards a tangible further opening of world
cause the crisis? No. Europeans also call for Wall Street and the honey pot of Main Street, trade.”
regulation of all markets, products and and when credit couldn’t expand into yet So why all the focus on IFCs? The distorted
participants without exception. This is like more new and increasingly fragile frontiers, it logic behind the criticism being fed to the G20
calling for research into Radar whilst the collapsed, as all asset bubbles eventually must. governments runs something like this…….
www.investmentinternational.com March 2009 Investment International
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