Why Tax Havens Will be at the Heart of the Next Financial Crisis

In financial stability terms the world of offshore — a world that includes places like Ireland, Luxembourg, Cayman and the City of London (see box) – has been where financial services players have been able to escape regulatory barriers at home, taking the cream from risky activities while shifting the risks onto taxpayers via bailouts and other nasties.  Offshore was very significantly at the root of the global financial crisis that erupted in 2008 — and on all evidence it will be at or near the epicentre of the next one too. We have written about this many times, and we have fingered London as being especially dangerous for global financial stability. And this comes in the context of the UK just having announced that they will be rowing back on money laundering checks and so on, in the name of ‘cutting red tape.’ (Read it and weep.) As was reported in the Financial Times not so long ago:

“Carolyn Maloney, a Democratic representative from New York, said there was a “disturbing pattern in the last few years of London literally becoming the centre of financial trading disasters””

Whatever one might think of Congresswoman Maloney, that statement is spot on.

http://www.nakedcapitalism.com/2015/09/why-tax-havens-will-be-at-the-heart-of-the-next-financial-crisis.html