The Mapping the Faultlines project has been an enormous undertaking by a small and relatively new organisation, facilitated by a very small group of people.
Work on the project began in earnest in February 2008. This web site, as part of the research output, has been rolled out during the autumn of 2009. In the meantime the secrecy world - made up of tax havens / secrecy jurisdictions and the secrecy providers (banks, lawyers and accountants in the main) who work from and with them - was subjected to the biggest shock since it came into existence. The financial crisis that began in August 2007 and which nearly collapsed the world banking system in October 2008 incorporated many offshore and secrecy world elements. No longer could this be ignored.
We must be absolutely clear: we are not suggesting the financial crisis had its origins offshore. In a very real sense it could not have done. As we argue throughout this work, very little of economic substance really happens offshore and in fact things are merely designed to appear as though they happen behind the secrecy veil. It would be ludicrous to make exception to that hypothesis and argue that the financial crisis was created in the Cayman Islands, Jersey or Switzerland.
Having said that, however, secrecy jurisdictions are not free from blame. They sliced, diced and effectively repackaged for onward sale to unsuspecting customers (who should have known better, but didn't) much of the toxic debt which had its origins in the housing bubbles of the USA and UK, and in the consumer credit booms of those and other places. This was a not a neutral activity. It was not chance that it took place in secrecy jurisdictions: secrecy was central to the opacity that obscured the nature of the toxic debt that was being traded. This opacity added to the lack of understanding of the debt on each bank's balance sheet - or off those balance sheets, in some notorious cases. That is one major reason that international attention has now been focused upon the tax haven / secrecy jurisdictions of the world. Another is that the resulting crisis in government revenues means that tax losses to the secrecy world can no longer be tolerated in the way they were before the crash.
That said, we have not focussed the attention of this project on remedies to these global issue, with one or two minor exceptions. When we began this project, our aims were to define the problem of the secrecy world, assess the way in which it facilitated illicit financial flows, to appraise its significance and to suggest where and how those flows were occurring. We now think those aims have been achieved, and in the process of achieving them we are able to offer to the world more information on the world of financial secrecy than has probably ever been made available before in history.
Clearly though this is not the end of the issue. The next step is to suggest how the problems we have identified can be tackled. In 2010 we intend to turn our attention to this issue and to use the knowledge we now have to suggest ways of better regulating the secrecy world - most of all by reducing its opacity and making it more transparent.
For that reason this web site is far from complete. There is much to add over the coming year. Watch this space.
