Tuesday, March 16, 2010

IMF realises offshore contributes to financial crisis

Following our blog about the IMF finding huge statistical discrepancies offshore (why did it take so long, we ask?) we'd like to highlight this section from Wealth Bulletin:

"Although the IMF is concerned about the undeclared assets held in offshore centres from a tax perspective, it is particularly concerned about how this money affects cross-border financial interaction and contributes to shocks in the global economy such as the recent credit crisis.

Milesi-Ferretti said: “The Cayman Islands were the largest foreign holder of private-label US mortgage-backed securities on the eve of the financial crisis. More information on the ultimate holders of these securities could clearly provide valuable insights on the transmission of the ‘sub-prime shock’ and the financial crisis more generally.”

Just as we have been saying all along. A recent IMF report linked to this material is available here.


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