Stiglitz commission calls for an end to ‘onshore’
July 2nd, 2009
A group of experts chaired by Nobel laureate Prof. Joseph Stiglitz has called for an end to offshore and onshore financial centres.
The draft report of the UN commission on the reform of the international monetary and financial system, presents a range of proposals for the reform of the global financial architecture following the global financial crisis.
Most notably, the report highlights how onshore and offshore tax havens have contributed to the so called, ‘shadow banking system’ and the problem of illicit capital flight, arguing that ‘well regulated economies have to be protected from those that are under- or unregulated.’
In a challenge to the G20’s crack down on offshore tax havens, the Stiglitz report notes that the worst offenders are not the remote island states, but financial centres in Nevada, Delaware, London, New York and Zurich.
The commission calls for a truly multi-lateral agreement, enforceable by international courts, which would remove tax secrecy and ringfence ‘rogue centres’ in both developed and developing economies that do not comply.
There is a significant role proposed for the UN, with a new intergovernmental commission on tax cooperation suggested under the auspices of the Economic and Social Council (ECOSOC) and an upgrade of the currently under-resourced UN tax committee.
Whilst involving the UN in economic affairs is not popular with many member states, the recognition by such a high level commission that banking and tax secrecy is a significant problem for the world economy is significant.
Civil society groups such as Global Financial Integrity, Tax Justice Network and Christian Aid have been calling for these kinds of reforms for a long time. They are now firmly on the international agenda.