Are Global Super-Rich Playing a 'Black' Game?

Bangalore: The research done by James Henry of Tax Justice Network (TJN) on the global rich accumulating wealth in tax havens has resulted in heated up discussions recently. The TJN that campaigns against tax havens and the Organization for Economic Cooperation and Development (OECD) are having disagreeing arguments on the topic. All amid these arguments the private bankers, who are suspected to be helping those wealth accumulators, are playing a safe game.

Global-rich have up to $32 trillion: Henry

According to the research done by James Henry, former Chief Economist at McKinsey, for the pressure group Tax Justice Network, the ‘global super-rich elites’ have up to 13 trillion pounds ($20 trillion) — equivalent to the combined GDP of the U. S. and Japan. The report further indicated that the figure could reach 20 million pounds ($32 trillion), representing around $280 billion in lost income tax revenues.

The study estimated the extent of private financial wealth amassed by individuals globally, excluding non-financial assets such as real estate, gold, yachts and racehorses. The research was done with the help of the data obtained from the World Bank, International Monetary Fund United Nations and Central Banks.

In the report, Henry said that the wealth has leaked into secretive jurisdictions such as Switzerland and the Cayman Islands with the help of private banks. This wealth is protected by a highly paid, industrious bevy of professional enablers in private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy.

According to the research, the top 10 private banks, which include UBS and Credit Suisse in Switzerland, as well as the US investment bank Goldman Sachs, managed more than 4 trillion pounds (over $6 trillion) in 2010, a sharp rise from 1.5 trillion pounds (over $2 trillion) five years earlier.

The TJN research on authored by James Henry also highlights the "often unsavory role" played by banks in catering to rich individuals who want to hide money offshore.

In a statement accompanying its research, TJN had criticized the OECD and other international bodies for not doing enough to track offshore wealth.