Advertisement

Financial Privacy

  • Chris Berg
Chapter
Part of the Palgrave Studies in Classical Liberalism book series (PASTCL)

Abstract

This chapter explores two dimensions of financial privacy, the demise of Swiss banking secrecy and arguments for the elimination of physical cash. Financial records are among the most sensitive forms of personal data, containing intimate details about individual daily activities and preferences. The chapter first looks at the history and trajectory of Swiss banking secrecy. Swiss banking secrecy formally developed in order to protect bank account holders from possibly intrusive prudential regulatory surveillance. In response to heavy pressure from high tax jurisdictions, the Swiss have been forced to reduce those secrecy protections. However the evidence suggests that banking secrecy was more valued for privacy rather than tax evasion reasons. The chapter then considers the arguments, most prominently aired by Kenneth Rogoff in his book The Curse of Cash, to eliminate large denomination physical currency. It finds that there are many other reasons apart from the desire to hold cash for criminal purposes to seek an anonymous payments system.

Bibliography

  1. Article 29 Working Party. “Press Release on the Swift Case Following the Adoption of the Article 29 Working Party Opinion on the Processing of Personal Data by the Society for Worldwide Interbank Financial Telecommunication (Swift).” 2006.Google Scholar
  2. Becker, Gary S., and Julio J. Elias. “Introducing Incentives in the Market for Living Organ Donations.” The Journal of Economic Perspectives 21, no. 3 (2007).Google Scholar
  3. Berg, Chris. “The Curtin-Chifley Origins of the Australian Bank Deposit Guarantee.” Agenda: A Journal of Policy Analysis and Reform 22, no. 1 (2015): 21.Google Scholar
  4. ———. “Safety and Soundness: An Economic History of Prudential Bank Regulation in Australia, 1893–2008.” PhD thesis. RMIT University, 2016.Google Scholar
  5. Berg, Chris, and Sinclair Davidson. “‘Stop This Greed’: The Tax-Avoidance Political Campaign in the Oecd and Australia.” Econ Journal Watch 14, no. 1 (2017): 77–102.Google Scholar
  6. Billner, Amanda. “In Shadow of Facebook, Cashless Sweden Fears Data Privacy Risks.” Bloomberg, 23 March 2018.Google Scholar
  7. De Montjoye, Yves-Alexandre, Laura Radaelli, and Vivek Kumar Singh. “Unique in the Shopping Mall: On the Reidentifiability of Credit Card Metadata.” Science 347, no. 6221 (2015): 536–39.Google Scholar
  8. Delaloye, François-Xavier, Michel A. Habib, and Alexandre Ziegler. “Swiss Banking Secrecy: The Stock Market Evidence.” Financial Markets and Portfolio Management 26, no. 1 (2012): 143–76.Google Scholar
  9. Edwards, Chris, and Daniel J. Mitchell. Global Tax Revolution: The Rise of Tax Competition and the Battle to Defend It. Washington, DC: Cato Institute, 2008.Google Scholar
  10. Farquet, Christophe. “Tax Avoidance, Collective Resistance, and International Negotiations: Foreign Tax Refusal by Swiss Banks and Industries between the Two World Wars.” Journal of Policy History 25, no. 3 (2013): 334–53.Google Scholar
  11. “Financial Abuse: Protecting Your Money from Others.” Australian Securities and Investment Commission, https://www.moneysmart.gov.au/life-events-and-you/families/financial-abuse.
  12. G20. “The Global Plan for Recovery and Reform.” 2009.Google Scholar
  13. Gordon, Richard A. “Tax Havens and Their Use by United States Taxpayers: An Overview.” Washington, DC: Department of the Treasury, Internal Revenue Service, 1981.Google Scholar
  14. Guex, Sébastien. “The Origins of the Swiss Banking Secrecy Law and Its Repercussions for Swiss Federal Policy.” Business History Review 74, no. 2 (2000): 237–66.Google Scholar
  15. Kahn, Charles M., James McAndrews, and William Roberds. “Money is Privacy.” International Economic Review 46, no. 2 (2005): 377–99.Google Scholar
  16. Organisation for Economic Co-operation and Development. “Addressing Base Erosion and Profit Shifting.” Paris: OECD Publishing, 2013.Google Scholar
  17. ———. Harmful Tax Competition an Emerging Global Issue. Paris: OECD Publishing, 1998.Google Scholar
  18. ———. Improving Access to Bank Information for Tax Purposes. Paris: OECD Publishing, 2000.Google Scholar
  19. ———. “A Progress Report on the Jurisdictions Surveyed by the Oecd Global Forum in Implementing the Internationally Agreed Tax Standard.” Paris: OECD Publishing, 2009.Google Scholar
  20. ———. Taxation and the Abuse of Bank Secrecy. Paris: OECD Publishing, 1985.Google Scholar
  21. Palan, R., R. Murphy, and C. Chavagneux. Tax Havens: How Globalization Really Works. Ithaca, NY: Cornell University Press, 2013.Google Scholar
  22. Parliamentary Assembly. “Co-Operation between Council of Europe Member States against International Tax Avoidance and Evasion.” Council of Europe, 1978.Google Scholar
  23. Piketty, Thomas. Capital in the Twenty-First Century. Cambridge, MA: The Belknap Press of Harvard University Press, 2014.Google Scholar
  24. Poitras, Laura, Marcel Rosenbach, and Holger Stark. “‘Follow the Money’: Nsa Monitors Financial World.” Der Spiegel, 16 September 2013.Google Scholar
  25. Rogoff, Kenneth S. The Curse of Cash. Princeton: Princeton University Press, 2016.Google Scholar
  26. Roth, Alvin. Who Gets What—And Why: The Hidden World of Matchmaking and Market Design. London: William Collins, 2015.Google Scholar
  27. Steinlin, Simon, and Christine Trampusch. “Institutional Shrinkage: The Deviant Case of Swiss Banking Secrecy.” Regulation & Governance 6, no. 2 (2012): 242–59.Google Scholar
  28. Tax Justice Network. “Financial Secrecy Index 2015: Narrative Report on Switzerland.” 2018.Google Scholar
  29. Tzanou, Maria. The Fundamental Right to Data Protection: Normative Value in the Context of Counter-Terrorism Surveillance. New York and London: Bloomsbury Publishing, 2017.Google Scholar
  30. Vogler, Robert. “The Genesis of Swiss Banking Secrecy: Political and Economic Environment.” Financial History Review 8, no. 1 (2001): 73–84.Google Scholar
  31. “Why Marijuana Retailers Can’t Use Banks.” The Economist, 22 January 2018.Google Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Chris Berg
    • 1
  1. 1.RMIT UniversityMelbourneAustralia

Personalised recommendations