Tax havens are not only used to hide financial assets, but also to increase them. This is the irritating conclusion offered up by political scientist Andrea Binder. Global banks headquartered in Germany and elsewhere use offshore financial centers such as the Cayman Islands to hand out cheap loans in US dollars to other banks, corporations, and companies around the world. With every loan that is disbursed in US dollars, the offshore banks increase US dollar supply, they ‘create foreign currency’. This process is neither subject to financial supervision nor to political control and undermines rules that would apply to banks in their home markets.
In conversation with Peter-André Alt, Andrea Binder explains how tax havens evade democratic control, and why this state of play threatens to undermine the stability of our financial system.
In collaboration with Die Junge Akademie
Andrea Binder
Andrea Binder is a Freigeist Fellow of the Volkswagen Foundation and research group leader at the Otto Suhr Institute for Political Science at Freie Universität Berlin. Her research focuses on global finance and humanitarian policy, especially with regard to tax and regulatory havens. Her latest book titled “Offshore Finance and State Power” was published by Oxford University Press in 2023. Andrea Binder is a member of Die Junge Akademie.
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