Financial Transparency Coalition

GFI has been known to repeat (and then repeat again) that for every $1 of aid that enters the developing world through the front door, $10 escapes out the back in illicit financial flows (for my explanation of these flows and their the magnitude, see: 10 times ODA, but what is that in Apple Pies?). While many people grasp the enormity of this number, few seem to appreciate what this means or how these flows can affect development. Some people even go so far as to say, “Why should we care? That money wasn’t going...

Illicit financial flows exit developing countries through two broad channels—as unrecorded capital flows from a country’s external accounts (captured by the World Bank Residual model) and trade mispricing (captured by the Direction of Trade statistics or DOTS model). GFI’s study Illicit Financial Flows from Developing Countries: 2002-2006 points out that some researchers have questioned the use of the trade mispricing model to capture illicit flows. They argue that data issues underlying the recording of partner country exports and imports introduce enough “noise” so that the trade mispricing model is unable to capture illicit flows. I was therefore...

Global Financial Integrity just put out a statement lauding the G20's commitment to end banking secrecy, increase transparency in global finance and curtail illicit financial flows from developing economies. Check out the full text of the speech below:

Washington, DC -- The G-20 reaffirmed its commitment to pressing uncooperative secrecy jurisdictions to adopt more rigorous reporting standards, tackle banking secrecy, and increase overall transparency in global finance in a communiqué released at the conclusion of today's summit in Pittsburgh.

"Transparency and accountability in global finance are the cornerstones of a strong and robust world economy,"...

So far, these are the really significant pieces that I've pulled from the statement while skimming through it. In the Preamble section:

22. To take new steps to increase access to food, fuel and finance among the world’s poorest while clamping down on illicit outflows. Steps to reduce the development gap can be a potent driver of global growth.

In the "A Framework for Strong, Sustainable, and Balanced Growth" section:

14. We call on our international accounting bodies to redouble their efforts to achieve a single set of high quality, global accounting standards within...