Financial Times FT.com

How tax havens helped to create a crisis

By Sol Picciotto

Published: May 5 2009 20:04 | Last updated: May 5 2009 20:04

Banks employ large teams of highly paid people to devise transactions mainly for the purpose of avoiding tax. These activities seem to be far more profitable than the humdrum business of managing payments and channelling savings towards investment. Why?

The answer shows the close link between tax avoidance and the speculation that has fuelled financial instability for 30 years. There were clearly other causes of the current crisis but the faults of the international tax system were a big contributory factor.

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