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A Step Change in Tax Transparency? An Event Study on How the Automatic Exchange of Information Did Not Affect Swiss Banks

Tim B.M. Stolper

No tax-mpg-rps-2017-10, Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: For decades the Swiss banking secrecy has made it a criminal act for banks in Switzerland to reveal information about their customers' identities. As of 2018, Switzerland will exchange banking information on foreign bank customers with the respective home countries on an automatic basis. This event study estimates the abnormal returns in the stock prices of Swiss banks around important milestones toward the automatic exchange of information. There is no evidence of significant or sizeable decreases in the market value of Swiss banks due to the new tax transparency. The minimum detectable e¤ect sizes are moderate and suggest a high statistical power. The null results stand in reasonable contrast to a significant increase in the level of tax compliance among the owners of Swiss bank accounts.

Keywords: automatic exchange of information; banking secrecy; tax evasion (search for similar items in EconPapers)
JEL-codes: G21 G28 H26 K34 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2017-10
New Economics Papers: this item is included in nep-ban, nep-iue and nep-law
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