Who are the enablers of secrecy?
Global financial secrecy requires a large infrastructure of lawyers, accountants, bankers, trust and company formation agents and other private actors, the intermediaries, who make the whole system function. In many small secrecy jurisdictions expatriate professionals constitute a significant share of the population. Their role cuts across individual havens.
While there are millions of companies and thousands of thinly capitalized banks in the secrecy jurisdictions, few wealthy people want to depend on them to manage and secure their wealth. Wealthy and stealthy investors ultimately need access to all the primary benefits of capital markets in wealthy OECD countries -- relatively efficient, regulated securities markets, banks backstopped by large populations of taxpayers, insurance companies, well‐developed legal codes, competent attorneys, independent judiciaries, and the rule of law. Generally, these can only be found in a handful OECD countries like the US, the UK, Switzerland, Belgium/Luxembourg, or Germany. It is the intermediaries that connect the large populations of wealthy people with the murkier jurisdictions.
While the market has thousands of players, the room at the top is surprisingly limited. Global accounting is still dominated by the "Big Four" firms of accountants, while a small number of "capital city" and haven‐based law firms in the so-called "Offshore Magic Circle" dominate the lawyering. As our report The Price of Offshore, Revisited makes clear, global private banking is dominated by fewer than 50 multinational banks.
International rules seeking to tackle the problem of secrecy rarely target these private intermediaries, even in the rare cases where prosecutions can be brought against their clients. Yet as our narrative report for Switzerland shows, it is often action against the intermediaries, rather than against jurisdictions themselves, that can be most effective.
Read more on our dedicated page about the intermediaries, here.