At least $21trn of unreported private wealth was being hidden in secret tax havens at the end of 2010 by the world's super rich, a major study has revealed.
A report from the Tax Justice Network, by former McKinsey & Co chief economist James Henry, said the sum was equivalent to the size of the US and Japanese economies combined.
The Price of Offshore Revisited also said there could be as much as $32trn of hidden financial assets help offshore by high net worth individuals.
The three private banks handling the most assets offshore on behalf of the global super rich are UBS, Credit Suisse and Goldman Sachs.
The report said its estimates were 'conservative' as it is only based on financial wealth. It excludes real estate, yachts and other non-financial assets owned offshore.
The study's main findings included:
- At the end of 2012 the top 50 private banks collectively managed more than $12.1trn in cross-border invested assets for private clients, including their trusts and foundations. This was up from $5.4trn in 2005, representing an average annual growth rate of more than 16%.
- The number of the global super-rish who have amassed a $21trn offshore fortune is fewer than ten million people. Of these, less than 100,000 people worldwide own $9.8trn of wealth held offshore.
- If this unreported $21-32trn earned a 3% rate of return, and that income was taxed at 30% it would generate about $190-280bn in income. Inheritance, capital gains and other taxes would boost the figure.
Report author Henry said there was a huge "black hole" in the world economy at a time when governments around the world are starved of resources.
"Despite pains to err on the conservative side, the results are astonishing," he added.
Henry used data from the Bank of International Settlements, International Monetary Fund, World Bank, and national governments.
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