The global super-rich have used financial service firms to
exploit overseas tax laws to hide $21trn offshore, according to a
new study.

The figure, based on 2010 data, is equivalent
to the size of the U.S. and Japanese economies combined, the report

The analysis discovered that the world’s top
50 private banks collectively managed more than $12.1trn in
cross-border invested assets for private clients, including their
trusts and foundations

This is up from $5.4trn in 2005, representing
an average annual growth rate of more than 16%.


Figure almost triple BCG

The research, commissioned by the Tax Justice
Network (TJN), was carried out by former McKinsey & Co Chief
Economist, James Henry.

The TJN estimates are significantly higher
than other reports on offshore wealth. Boston consulting Group
estimated that in 2011 it totalled $7.8trn, up 2.7% from 2010.

The three private banks that are handling the
most assets offshore on behalf of the super-rich are UBS, Credit
Suisse, and Goldman Sachs.

The top ten banks alone accounted for more
than half of the top fifty’s asset total, the report suggested.


Official sources

James Henry, TJN senior adviser and main
researcher, said: “It turns out that this offshore sector – which
specialises in tax dodging – is basically designed, not by shady no
name banks in sultry islands, but by the world’s largest banks, law
firms and accounting firms.”

The data was drawn from the World Bank, the
IMF, the United Nations, central banks, the Bank of International
Settlements, and national treasuries.