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Swiss Banking Secrecy: The Stock Market Evidence


Delaloye, Francois-Xavier; Ziegler, Alexandre; Habib, Michel (2012). Swiss Banking Secrecy: The Stock Market Evidence. Financial Markets and Portfolio Management, 26(1):143-176.

Abstract

We examine the stock price reactions of four Swiss banks to negotiations between Switzerland and the European Union and between Switzerland and the United States to (i) obtain an estimate of the value of banking secrecy to Swiss banks, and (ii) distinguish between tax evasion and genuine privacy concerns as sources of that value. We find that the value of banking secrecy to the private banks is large, accounting for 8 to 14% of their market value; in contrast, the value of banking secrecy to the universal banks is small. We further find that tax evasion may be less important and privacy concerns more important a source of value of banking secrecy than might previously have been thought.

Abstract

We examine the stock price reactions of four Swiss banks to negotiations between Switzerland and the European Union and between Switzerland and the United States to (i) obtain an estimate of the value of banking secrecy to Swiss banks, and (ii) distinguish between tax evasion and genuine privacy concerns as sources of that value. We find that the value of banking secrecy to the private banks is large, accounting for 8 to 14% of their market value; in contrast, the value of banking secrecy to the universal banks is small. We further find that tax evasion may be less important and privacy concerns more important a source of value of banking secrecy than might previously have been thought.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Banking and Finance
Dewey Decimal Classification:330 Economics
Language:English
Date:2012
Deposited On:20 Feb 2012 16:07
Last Modified:05 Apr 2016 15:25
Publisher:Springer
ISSN:1934-4554
Publisher DOI:https://doi.org/10.1007/s11408-011-0178-6
Other Identification Number:merlin-id:5095

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