London: Consulting-driven research which revealed that a global, super-rich elite has at least $21 trillion (£13tn) stashed away in secret tax havens caused uproar around the world when it was published yesterday.
In fact there could be as much as $32 trillion of hidden financial assets held offshore by high net worth individuals, according to The Price of Offshore Revisited, the most detailed and authoritative estimate ever made of the offshore economy
The report, was written by James Henry, a former chief economist at McKinsey & Co, for the Tax Justice Network.
Henry said this $21 trillion — itself more than the GDPs of USA and Japan combined — is actually a conservative figure and the true scale could be $32 trillion..
The research used data from the Bank of International Settlements, International Monetary Fund, World Bank, and national governments.
The findings in Henry's report include:
- At the end of 2010, the 50 leading private banks alone collectively managed more than $12.1 trillion in cross-border invested assets for private clients
- The three private banks handling the most assets offshore are UBS, Credit Suisse and Goldman Sachs
- Less than 100,000 people worldwide own about $9.8 trillion of the wealth held offshore.
James Henry commented, "This ..focuses our attention on a huge "black hole" in the world economy that has never before been measured — private offshore wealth, and the vast amounts of untaxed income that it produces.
"This at a time when governments around the world are starved of resources, and we are more conscious than ever of the costs of economic inequality."
Henry went on to lambast both the banking and regulatory authorities for allowing this "astonishing" situation to develop.
"It turns out that this offshore sector — which specializes in tax dodging — is basically designed and operated, not by shady no-names banks..but by the world's largest private banks, law firms, accounting firms, headquartered in First World capitals", he said.
"It is scandalous that official institutions like the Bank for International Settlements, the IMF, the World Bank....have devoted so little research to this sector."
Paradoxically, he argues, "From another angle, this study is really good news. The world has just located a huge pile of financial wealth that might be called upon to contribute to the solution to our most pressing financial problems".