Journal of Financial Economics Vol. 126 No. 3 2017
Offshore schemes and tax evasion: The role of banks
Abstract
We use mandatory Russian banks’ reports to the Central Bank to construct a novel measure of offshore-banking. Individual bank involvement in offshore operations is calculated as a fraction of total transactions with foreign countries that go through offshore financial centers. We find that offshore-active banks perform less financial intermediation and focus more on international wire transfers. We show a positive relation between banks’ offshore activities and tax evasion of companies doing business through these banks. Finally, we show that the Central Bank eventually responds to this behavior: offshore-active banks have higher likelihood of license revocation and criminal investigation against top-management.
- DOI
- 10.1016/j.jfineco.2017.09.004
- Volume
- 126
- Issue
- 3
- Pages
- 516-542
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref