THE TELEGRAPH: • New Financial Stability Board as global overseer • Tax havens and hedge funds to be punished • Heavy scrutiny for banks
Gordon Brown and his fellow world leaders have pledged the biggest crackdown on tax havens, hedge funds and banks in modern history as the price to be paid for the multi-trillion dollar bail-out of the world economy.
"The era of banking secrecy is over", the Prime Minister declared, as the Group of 20 leading nations agreed to impose a new range of regulations on banks and non-bank financial institutions as a punishment for contributing to the crisis.
Harsh fines and sanctions will be levied on tax havens that refuse to publish details of their accounts; hedge funds will have to provide more detailed accounts in the future; and bankers will have their bonuses more heavily controlled and taxed throughout the world, the communique pledged.
The range of new regulations will be implemented by national governments in the coming months, officials said, after the G20 agreed on more significant and far-reaching reforms than had been expected.
In what will be interpreted as a victory for the French and German factions, which had emphasised the importance of regulation over new fiscal giveaways, the G20 also ordered the creation of a new Financial Stability Board dedicated to monitoring leverage and inter-connectedness of international financial institutions. >>> By Edmund Conway Economics Editor | Friday, April 3, 2009
THE TELEGRAPH: G20 Summit: Blacklisted Tax Havens Face Sanctions
Tax havens that refuse to sign anti-secrecy agreements face expensive sanctions under an unprecedented global effort to catch illegal tax evaders.
Switzerland, Singapore, the Cayman Islands, Monaco, Luxembourg and Hong Kong are among 45 territories blacklisted on Thursday by the Organisation for Economic Co-operation and Development and now threatened with punitive financial retaliation for their banking secrecy.
Among the sanctions being considered by the G20 are the scrapping of tax treaty arrangements, imposing additional taxes on companies that operate in non-compliant countries, and tougher disclosure requirements for individuals and businesses that use shelters.
Of the offending jurisdictions, 40 "have committed to the internationally agreed tax standard" but have yet to implement it. Only Costa Rica, Malaysia, Philippines and Uruguay have refused to sign up altogether. Jersey, Guernsey and the Isle of Man are fully compliant already.
Illegal tax evasion through offshore shelters has been a long-standing irritation for Gordon Brown, President Barack Obama and French President Nicolas Sarkozy. An estimated $7 trillion of assets are held offshore and, according to pressure group Tax Justice Network, developed countries lose $180bn a year in evaded taxes. >>> By Philip Aldrick, Banking Editor | Friday, April 3, 2009
