New insights into Debt Crisis

Table of Content

4 The synchronisation between EU stock market 6

6 Self-fulling debt crises. 11

6.1 Debt intolerance, defaults, crisis. 12

Introduction

Particularly, when the government tries to reduce private debt, this results in an increase of public debt. So on the one hand the debt crisis has a significant impact on the Eurozone, as it constantly raises new issues as to its viability and on the other hand the future of the Euro as a common currency as described Blundell-Wingall, Slovic (2010, p.4).

1 Consequences of Crisis

The real consequences associated with the banking crisis (higher unemployment) describe in general, changes of the current account balance of whatever sign are not necessarily an indication of imbalances. Viewed in this light, they may simply reflect intertemporal saving as well as consumption and investment preferences of private enterprises, households and governments presented by Obstfeld and Rogoff (1994). Moreover, rising prices and unit labour costs and strong investment could be due to a catch-up of periphery countries within the euro area.

Candelon, Palm (2009, p.3) noticed it may affect government tax revenues, which will shrink, and on the other hand government spending, which will rise, through social security (unemployment benefits) and through measures designed to stimulate global demand. Nevertheless, this automatic stabilizer mechanism deepens the budget deficit and increases the debt. As a consequence, this restrictive fiscal policy could increase the probability of default for households, increasing the amount on non-performing loans, again putting tensions on the banks’ balance sheet.

Hofmann (2012, p. 2-3) pointed out that a country with unsustainable debt exercises emergency measures to regain sustainability. The goal of economic growth requires measures to increase a country’s competitiveness, that include austerity, default and restructuring, as well as inflation coupled with depreciation of the currency. On the other hand monetary depreciation caused by expansionary monetary policy, potentially coupled with Quantitative Easing, is the easiest way out. As a result, that may raise the country’s competitiveness through boosting exports and potentially attracting capital lured by cheap production cost. Viewed in this light, a country in a currency union lacks the power to control and enforce these measures. In sum, depreciation of the Euro is simply impossible without detrimentally affecting all of the 17 Euro zone countries that are intractably linked by the same currency.

2 The Casy study of Greece

Sakellaropoulos, T. D. (2012, p. 2-5) pointed out that Greece’s economic history during the 19th and 20th centuries shows that the development model followed was a capitalist modernization “pushed” from abroad and characterized by slow progress, an economy characterized by a weak industrial base, the long existence of agricultural structures and institutional backwardness.

Moreover, in the sense of the spill-over of growth and the expansion of enterprises to the South, the expansion of the import-export sector and foreign trade imbalances as well as the increase of international public borrowing and debt, international division of labor has made Greece extremely vulnerable to international fluctuations and turmoils, especially in relation to the monetary/ exchange rate and fiscal sector.

3 Economic Crises

Nevertheless, the real economic crises are either crises of underproduction (that is crises of the old type 1830-1857) or crises related to the overproduction of basic agricultural products in the framework of the prevalent model of monoculture farming and monoexport (e.g. raisins in the 19th century, tobacco crop and cotton in the 20th century). In the latter cases the crises were due to the sudden fall in the international demand (raisin crisis of 1893, tobacco crisis of 1930). An industrial crisis of overproduction leading to a significant de-industrialization took place as late as 1970 and the depression that started with the oil crises of 1973 and 1979. The result of this crisis was a process of deindustrialization that in a period of 10 years resulted in the closing down of almost half of the Greek industry.

The crisis took nonetheless the form of a fiscal and debt crisis.The debate on and the search for the appropriate remedies for the debt crisis and the euro-zone crisis in the framework of globalization, EU, and the need to remain part of the euro-zone needs to take into consideration one basic finding in relation to the real causes of the global crisis which started with Lehman Brothers Bankruptcy in 2008.

In other words, globalization –starting in 1989- has resulted in an unprecedented unification of financial markets at global level. At the same time, this has not been coupled with supranational regulatory mechanisms that would protect the global and national economies from monetary and exchange rate crises created by the power of limited but powerful financial centers.

Viewed in this light, prospect we demand once more the adoption of common European economic, fiscal and social rules as an effective barrier to the uneven growth of the Eurozone. Those opposing such strategy are those of neoliberal aspirations or those advocating economic nationalism.

Pappas, V., Ingham, H., Izzeldin, M., Steele, G. R. (2013, p. 2) presented that financial markets, retail markets and labour markets were integrating at different speeds. In the broadest macroeconomic context, the Eurozone still had to come to terms with the inconsistent trinity. Where there is a single currency only two of three are possible: a) fixed exchange rate; b) free capital movement; c) independent monetary policy. While constituent nations could not monetize their sovereign debt, they could borrow money at much lower interest rates than (for some) their fundamentals would suggest. For Greece, borrowing financed consumption rather than the investment that might have raised international competitiveness.

However, financial crisis struck, particular stresses within the Eurozone derived from: a) overly cheap credit; b) the bursting of a generalized property bubble; and c) huge variation in productive efficiencies and, therefore, competitiveness across the Eurozone.

As weak economic fundamentals in one nation are brought into the spotlight by a crisis, investors may fear that other nations have similar traits. The reaction can then set contagion in train (Masson 1999). For example, towards end-2009, when problems in Greece were traced to chronic fiscal/debt problems, the fear grew of similar pressures in Italy and Portugal.

4 The synchronisation between EU stock market

Gómez-Puig, M., Sosvilla R., Simón, C. (2014, p. 6-10) examined the synchronisation between EU stock market indices during the recent financial crisis, they used a DCC-GARCH with a Markov-Switching model. The models allow for the time variation in correlation dependencies among the nations, as well as for the endogenous estimation of the crisis transition date.

Their measures are devised for the duration and intensity of the crisis, and for correlation change between precrisis and crisis periods. More specifically, duration and intensity measures build on the fact that all nations neither ‘enter’ nor ‘exit’ the crisis regime at the same time. Dynamic correlation change measures indicate that sub-regions within EU reveal varying contagion patterns. These measures allow us to assess the synchronisation patterns of the financial crisis and to distinguish between regional and sub-regional contagion.

They confirm financial contagion in five of the six nation groups. Not all of Europe’s markets are hit by the crisis at the same time. In particular, the Core EU group is the first to be affected, with the Baltics lagging by one year. On average the nations of the EU-15 are affected earlier than the NMS, with the latter exhibiting a lag of over five months. This gives confirmation to the idea of a varying EU financial integration process. Even within EU-15, however, there are notable exceptions, most notably those of Luxembourg and Greece. Their experience of the crisis comes, respectively, five months earlier/later than their EU-15 counterparts. Nations which were forerunners in the accession talks were also affected relatively earlier.

Again, in the broadest terms, EU-15 was affected most heavily, with Luxembourg and Greece the worst hit. For Luxembourg this may be attributed to the reliance on finance, particularly hedge funds. For Greece, the lack of competitiveness and chronic sovereign debt problems are well-documented. The PIIGS group was the most severely affected; the RAMS II group was the least severely affected. In general, both the degree of industrialisation and market concerns over the financing of sovereign debt are relevant to the intensity of any financial crisis. The distinction between regional and sub-regional contagion is of interest. There are some instances where stock markets become more aligned during a crisis (regional contagion); (i.e., Scandinavian, PIIGS), and others where the greater alignment of stock markets occurs only for nations that share similar (trade and development) characteristics (sub-regional contagion); (i.e., Core EU).

In fact, not only did the period of financial turmoil turn into a global financial crisis, but it also began to spread to the real sector, with a rapid, synchronized deterioration in most major economies. This financial crisis put the spotlight on the macroeconomic and fiscal imbalances within European Economic and Monetary Union (EMU) countries which had largely been ignored during the period of stability when markets had seemed to underestimate the possibility that governments might default (see Beirne and Fratzscher, 2013).

Indeed, since 2010, Greece has been bailed out twice and Ireland, Portugal and Cyprus have also needed bailouts to stay afloat. These events brought to light the fact that the origin of sovereign debt crises in the euro area varies according to the country and reflects the strong interconnection between public and private debt (see Gómez-Puig and Sosvilla-Rivero, 2013).

Gómez-Puig, M., Sosvilla R., Simón, C. (2014) in their research paper: First, to tested for the existence of possible Granger-causal relationships between the evolution of the yield of bonds issued by both peripheral and central EMU countries, second, to determined endogenously the breakpoints in the evolution of those relationships and third, to detected contagion episodes according to an operative definition: an abnormal increase in the number or in the intensity of causal relationships compared with that of tranquil periods, triggered by an endogenously detected shock.

According to their results, we see around two thirds out of the total endogenously identified breakpoints occur after November 2009, when Papandreou’s government revealed that its finances were far worse than previous announcements, suggesting that most of the breakpoints can be explained by systemic shocks directly connected to the euro sovereign debt crisis. Second, the number of causal relationships increases as the financial and sovereign debt crisis unfolds in the euro area, and causality patterns after the break dates are more frequent when EMU peripheral countries are the triggers. Third, in the crisis period we find evidence of 101 causal relationships: 41 represent new causality linkages and 60 are patterns that already existed in the tranquil period. However, they found an intensification of the causal relationship in 42 out of the 60 cases.According to their opinion, these 41 new causality patterns, together with the intensification of the causal relationship in 70% of the cases can be considered an important operative measure of contagion that is consistent with the definition we have proposed.

As a result we what we mentioned above, we can say that regarding to policy implications, their results seem to indicate that EMU has brought about strong interlinkages of the participating countries which are reasonable within a group of countries that share an exchange rate agreement (a common currency in the case of the euro area) and where financial crises tend to be clustered. Therefore, they consider that their results might have some practical meaning for investors and policymakers, as well as some theoretical insights for academic scholars interested in the behaviour of EMU sovereign debt markets.

Casiraghi, M., Gaiotti, E., Rodano, M. L., Secchi, Al. (2013, p. 7) described that during the summer of 2011 sovereign debt market tensions resurfaced in some euro-area countries. The strains affected Italy directly and were rapidly transmitted to the banking sector and other segments of the domestic financial market. Corporate bond yields and money market spreads soared, interbank loans dried up, and stock indexes plummeted. The effects were amplified both by the abrupt interruption of capital flows among euro-area countries and by the sudden funding freeze faced by banks on international markets. In other words, the adverse impact on the cost and availability of credit to the private sector led to a sizeable drop in aggregate demand. In the summer of 2012 fears of a possible break-up of the euro area aggravated financial tensions and further increased the crosscountry disparities in monetary conditions.

In response the ECB took several unconventional measures. It reactivated the Securities Markets Programme (SMP) and extended it to Italian and Spanish government bonds in August 2011, it granted three-year loans to banks (3-year Longer-Term Refinancing Operations, LTROs) in December 2011 and in February 2012, and it announced the Outright Monetary Transactions (OMTs) in September. These instruments were designed to support market segments that were dysfunctional, foster bank liquidity, avert a credit crunch and dispel the fears of a euro-area breakup.

Their results suggest that the SMP, the 3-year LTROs and the OMTs have been effective in offsetting undue increases in government bond yields and easing money markets tensions, with a positive and significant impact on credit supply. Transmitted mainly through the credit channel, the policy measures induced a cumulative output growth response equal to 2.7 percentage points in 2012-2013. In considering these findings, one should bear in mind that a full counterfactual scenario is beyond the scope of this paper. The ECB’s unconventional policies may have avoided a generalised collapse of financial and credit markets, which cannot be studied using the standard econometric tools insofar as the effects would have been very large and highly non-linear.

Nevertheless, their analysis provides an estimate that may be interpreted as a lower bound of the overall macroeconomic impact of the unconventional monetary policy measures considered.

5 SMP, LTROs, OMTs

In order to estimate the impact of the non-standard measures adopted by the ECB in 2011 and 2012 (SMP, 3-year LTROs, OMTs) on the Italian economy, we first adopted specific estimation approaches to measure the impact on money market interest rates, government bond yields and credit availability and then mapped the estimated effects onto their macroeconomic implications, taking advantage of the Bank of Italy quarterly model of the Italian economy.

The first conclusion is that the SMP has been effective in contrasting undue increases in government bond yields. This conclusion is based on a set of regressions linking daily changes in bond yields with SMP purchases and a series of control variables. The estimates indicate that the effect of the SMP on Italian government bond yields is around 2 basis points per billion euros purchased.

Second, the LTROs had a significant impact on credit supply, mainly through a sizeable reduction in money market spreads, associated with the revival of the interbank market. Although bank lending continued to decrease in Italy in 2012, this result suggests that the unconventional operations may have avoided a much more severe credit restriction and helped to counteract the decline in lending to firms both in 2012 and 2013.

Third, the announcement and the design of the OMTs had very large frontloaded effects on the sovereign bond market. Yields on Italian government bonds decreased sharply after President Draghi’s speech at the end of July 2012, and the improvement was reinforced by the ECB Governing Council announcements in early August and September. From a macroeconomic perspective, our simulations indicate that the unconventional measures have had a powerful effect on the Italian economy through several channels. Based on the standard elasticities included in the BIQM, the cumulative GDP growth response comes to 2.7 percentage points over the period 2012-2013. One of the main channels of transmission is the improvement in credit availability, in particular through its impact on investment.

The simulations also show that the set of unconventional operations had a favourable effect on relevant macroeconomic variables that are usually not emphasised in discussions on the effectiveness of monetary policy. They found that the deficit-GDP ratio improves greatly thanks to the combination of lower interest expenses and higher growth. The flow of new impaired bank loans decreases, as lower interest rates and higher growth support businesses’ profits and cash flow. There accordingly appears to be good reason to believe that the unconventional policies helped avoid a further worsening of the adverse spiral between sovereigns, banks and growth.

All in all, while the Securities Markets Programme, the 3-year Longer-Term Refinancing Operations and the Outright Monetary Transactions did not prevent the Italian economy from falling into recession, they did keep it out of a much deeper depression. Even so, interest rates did not completely regain their pre-crisis levels, credit conditions remained relatively tight, and business lending continued to contract, although less sharply than would otherwise have been the case. These findings support the thesis that some of the underlying causes of the sovereign debt crisis could not be addressed and solved by monetary policy alone. Nevertheless, our results provide powerful evidence for the argument that the unconventional monetary measures supported economic activity by avoiding a further downward spiral of the crisis of confidence and a much more severe credit crunch.

6 Self-fulling debt crises

Aguiar, M., Amador, M., Farhi, E., Gopinath, G., (2013, p. 3) presented model that highlights the fact that partial default via inflation versus explicit default may have asymmetric costs, and the key comparative static is in regard to the relative costs of inflation. Viewed in this light, a useful feature of separating the costs of full default from those of inflation is that a country can credibly commit not to partially default through inflation by issuing bonds in foreign currency; a similar commitment technology for explicit default is not as readily available. They therefore address in their research paper that the positive and normative implications of issuing domestic versus foreign currency bonds in an environment of limited commitment, and how this tradeo varies with the level of inflation commitment when the government issues domestic-currency bonds.

What does it mean? In equilibrium, risk-neutral foreign investors purchase sovereign bonds at prices that reflect anticipated government decisions to repay, default, or inflate. In turn, the government’s optimal policy depends on the equilibrium interest rate, raising the possibility of self-fulling debt crises. According their results, environment allows us to explore how the degree of inflation credibility alters the country’s vulnerability to self-ful.

In turn, the government’s optimal policy depends on the equilibrium interest rate, raising the possibility of self-fulling debt crises. According their results, environment allows us to explore how the degree of inflation credibility alters the country’s vulnerability to self-fulling debt crises. A main finding of their analysis is that inflation credibility and by implication the choice of domestic versus foreign currency bonds has an ambiguous impact on the possibility of a self-fulling debt crises and on welfare.

6.1 Debt intolerance, defaults, crisis

Reinhart, C. M., Rogoff, K. S., (2010, p. 3) presented in their paper following factors of defaults and banking crisis. First, private debt surges—fueled by both domestic banking credit growth and external borrowing are a recurring antecedent to domestic banking crises; governments quite often contribute to this stage of the borrowing boom. (Banking crises in financial centers have also historically helped predict domestic banking crises elsewhere). Second, banking crises (domestic ones and those in international financial centers) often precede or accompany sovereign debt crises. Third, public borrowing accelerates markedly and systematically ahead of a sovereign debt crisis (be it outright default or restructuring); the government often has “hidden debts” that far exceed the better documented levels of external debt. These hidden debts include domestic public debt (which prior to our data were largely undocumented) and private debt that become public (and “publicly” known) as the crisis unfolds. Quantifying public contingent liabilities is beyond the scope of this paper. A fourth related hypothesis (which we document but do not test) is that during the final stages of the private and public borrowing frenzy on the eve of banking and debt crises and (most notoriously) bursts of hyperinflation, the composition of debt shifts distinctly toward short-term maturities.

Debt intolerance described by Reinhart, C. M., Rogoff, K. S., (2010, p. 11) manifests itself in the extreme duress many emerging markets experience at debt levels that would seem quite manageable by advanced country standards. “Safe” debt thresholds for highly debt intolerant emerging markets turn out to be surprisingly low, perhaps as low as fifteen to twenty percent in many cases, and these thresholds depend heavily on a country’s record of default and inflation. However, debt intolerance likely owes to weak institutional structures and a problematic political system that makes external borrowing a useful device for developing country governments to avoid hard decisions about spending and taxing and global investors rightly suspicious about the government’s motives. Simply put, the upper limit to market access is lower when governments suffer from an intolerance to repayment but not to borrowing.

Al-Saffar, Y., Ridinger, W., and Whitaker, S., (2013, p. 17) described in their paper The role of external balance sheets in the financial crisis, that structural changes in the liquidity risk profiles of banks away from short-term funding mismatches and toward more stable, longer-term funding of assets and business activities, international regulators under Basle III intend to implement a Net Stable Funding Ratio (NFSR) requirement. This will require long-term assets to be funded with at least a minimum amount of stable liabilities. The results in their paper point to fragilities arising from funding long-term assets with short-term debt liabilities, particularly to other banks, consistent with the need for an NFSR. A similar point applies to the related Basle III Liquidity Coverage Ratio, which will require banks to maintain sufficient liquid assets to meet liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario specified by supervisors.

The finding that a country’s external bank balance sheet measured on a residency basis — including foreign banks — appears to contain more information about vulnerabilities than the consolidated balance sheets of banks headquartered in that country, reinforces the need for close co-operation between national banking supervisors. National supervisors need to be aware of significant cross-border activity carried out by resident foreign branches which are not within their supervisory control and need to consider the importance of resident foreign branches for financial stability. Indeed, that is why the Basel Concordat on cross-border banking supervision gives host authorities responsibility for the liquidity of resident foreign branches.

Calls for better monitoring of the risks inherent in national balance sheets and the removal of biases leading to over reliance on short-term debt were prominent in the aftermath of the EME crises of the 1990s, for example the Draghi Report (2000). More recently, the G30 report on ‘Long-term finance and economic growth’ and the Committee on International Economic Policy and Reform have called for policymakers to reduce incentives for short-term cross-border flows and for a reduction of biases in favour of debt over equity financing. The results of this paper are consistent with those recommendations about the structure of national balance sheets. But this paper does not consider the question of the optimal size of balance sheets or the costs and benefits of gross capital flows overall. In this regard, it is notable that large external equity liabilities were not associated with larger falls in GDP.

Conclusion

What we mentioned in this paper shows that macroeconomic national differences in the euro area and their solutions should be transferred only on the shoulders of national economies , but also the EU regulator and monetary authorities. It is necessary to think about their role and its implementation is essential for the recovery of the euro area. The main cause of the crisis in the euro area debt accumulated before the outbreak of the crisis and private debt . In other words, the massive expansion of debt in the euro area continued despite the outbreak of the financial crisis. Fiscal pact envisages that future governments if hit and will again bail the private sector will be punished and it all drawn further implications. However, this proves to be not sufficient and strategic solutions. Troubled euro states clearly faces significant internal pressure in the national economies in the context of pressure on competitiveness through social cuts and rising retirement age.

References

Aguiar, M., Amador, M., Farhi, E., Gopinath, G., (2013) Crisis and commitment: Inflation credibility and the vulnerability to sovereign debt crisis, Working Paper 19516, National Bureau of Economic Research, http://www.nber.org/papers/w19516
Al-Saffar, Y., Ridinger, W., and Whitaker, S., (2013), The role of external balance sheets in the financial crisis, Financial Stability Paper No. 24 – October 2013, Bank of England, ISSN 1754–4262
Beirne, J. & Fratzscher, M. (2013). The pricing of sovereign risk and contagion during the European sovereign debt crisis. Journal of International Money and Finance, 34, 60-82.
Blundell-Wingall, A., Slovic, P. (2010) “The EU Stress Test and Sovereign Debt Exposures.” OECD Working Papers on Finance, Insurance and Private Pensions, p. 4
Candelon, B., Palm F.C. (2010) „Banking and Debt Crises in Europe: The Dangerous Liaisons?“, CESifo working paper Fiscal Policy, Macroeconomics and Growth, 3001, available at: http://hdl.handle.net/10419/38910
Casiraghi, Marco and Gaiotti, Eugenio and Rodano, Maria Lisa and Secchi, Alessandro, The Impact of Unconventional Monetary Policy on the Italian Economy During the Sovereign Debt Crisis (September 27, 2013). Bank of Italy Occasional Paper No. 203. Available at SSRN: http://ssrn.com/abstract=2405451 or http://dx.doi.org/10.2139/ssrn.2405451
Gómez-Puig, Marta and Sosvilla Rivero, Simón, Causality and Contagion in EMU Sovereign Debt Markets (February 3, 2014). Research Institute of Applied Economics Working Paper 2014/03. Available at SSRN: http://ssrn.com/abstract=2405929 or http://dx.doi.org/10.2139/ssrn.2405929
Hofmann, Ch. (August 1, 2012) „The Euro Zone Crisis“, available at SSRN: <http://ssrn.com/abstract=2121499>
Masson, P. (1999) ‘Contagion: macroeconomic models with multiple equilibria’, Journal of International Money and Finance, 18(4), 587-602.
Pappas, Vasileios and Ingham, Hilary and Izzeldin, Marwan and Steele, G R, Financial Markets Synchronization and Contagion: Evidence from CEE and Eurozone (October 1, 2013). Available at SSRN: http://ssrn.com/abstract=2411978 or http://dx.doi.org/10.2139/ssrn.2411978
Reinhart, C. M., Rogoff, K. S., (2010), From financial crash to debt crisis, Working Paper 15795, http://www.nber.org/papers/w15795, National Bureau of Economic Research
Sakellaropoulos, Theodoros D., Debt Crisis and the Welfare State in Greece (2012). Global Dialogue, 2012. Available at SSRN: http://ssrn.com/abstract=2424081

New insights into Offshore Financial Centers

Table of Content

Introduction.. 3

1 What are Offsshore Centres?. 3

1.1 Offshore Corporate Governance in Practice. 3

1.2 Ownership of Voting Shares. 4

2 Transfer Pricing.. 4

3 Offshore Growth.. 6

3.1 Do OFCs make bad neighbors?. 6

3.2 Offshore bond issuance decision. 6

4 Cost of outsourcing.. 9

5 What includes offshoring?. 11

6 Offshore Centres in Slovakia.. 15

Conclusion.. 16

References. 17

Introduction

In recent years, outsourcing of broader ranges of tasks by a larger number of firms has spread across the national boundary. Although the decision of offshore outsourcing by heterogeneous firms has become one of the hottest research topics in international economics, empirical studies have been constrained by the limited availability of micro-data. The increasing offshore R&D activities performed by multinational companies have also attracted the interest of international and industrial economists.

1 What are Offsshore Centres?

The IMF defines Offshore centers (OFC)s as follows: (i) Jurisdictions that have relatively large numbers of financial institutions engaged primarily in business with non-residents; and (ii) jurisdictions with financial systems with external assets and liabilities out of proportion to domestic financial intermediation designed to finance domestic economies; and (iii) centers which provide some or all of the following services: low or zero taxation; moderate or light financial regulation; banking secrecy and anonymity.

The number of offshoring firms (the extensive margin) and the real value added per offshoring firm (the intensive margin) fluctuate over the business cycle, and thus affect output, prices and wages in both the parent and the host countries.

However, Corruption money laundering in offshore financial centers is further connected with another largely unexplored phenomenon in the world economy – round-trip investment, i.e. the transfer of funds abroad in order to bring some or all of the investment back to home country as foreign investment.

1.1 Offshore Corporate Governance in Practice

Under English or Swiss law – the leading hedge fund centers which we shall use by way of example – it is important that any offshore company has its central management and control in its jurisdiction of incorporation, or that this is at least not carried out from the UK or Switzerland. In other words, central management and control refers to the board of directors or management committee of the company according to the information from report of Laven Financial Services (2013, p. 3-4). Laven Financial Services offers corporate governance, international compliance and operational support services, as well as directorships to offshore management companies.

1.2 Ownership of Voting Shares

According to the Laven F. S. depending on the general structure, the (voting) shares of an offshore management company are often held by another offshore company or trust, or an individual shareholder who is usually offshore domiciled. Onshore directors and persons may hold voting shares but this should be avoided as it will be deemed to add to the control that is exercised onshore.

Viewed in this light, with regard to the UK , as of 1 January 2013, new rules on Controlled Foreign Companies were introduced which brought about the need for any UK businesses with overseas subsidiaries to understand the relevant legislation as it may now have a direct fiscal impact on the group overall. In short, the rules on Controlled Foreign Companies determine whether a non-UK company is controlled by a UK person/company (whether by virtue of legal, economic or accounting control) and therefore a charge should be applied on its profits.. Irrespective of this new law, for many UK based managers it is still common for UK resident directors to hold controlling interests in offshore companies that are linked to asset management responsibilities. This is probably very likely to lead to the UK tax authority to re-qualify the domicile of the offshore companies. In practice, this happens especially if all the other considerations demonstrate control from the onshore jurisdiction.

2 Transfer Pricing

Moreover, well controlled and exercised corporate governance should also include an assessment of transfer pricing, where relevant. Offshore businesses (e.g. offshore management companies) and onshore service providers (e.g. onshore sub-managers) that are connected parties (for example due to links of ownership and/or common management) will need to consider issues which relate to the value of the services provided from onshore to offshore.

More to the point, a documented assessment should be carried out for the purpose of determining a fair price for the services and in support of the transactions between the parties. This process should establish an understanding of what is market practice for similar services and to limit therefore any potential for queries by tax authorities in relation to the transactions.

In terms of recent developments, the Alternative Investment Fund Managers Directive (AIFMD) entered into force on 22 July 2013 and introduced the Letter-Box Entity provisions which are relevant, for example, to structures where an offshore manager delegates certain activities to an onshore sub-manager. Where an offshore manager is deemed a letter-box entity, it can no longer be considered as the manager of the fund in question and would therefore not be compliant with the AIFMD described by Laven F. S. (2013).

As a corporation, or body corporate, a private company is regarded in law as having a separate legal personality from its shareholders (owners) and directors (managers) (Courtney 2002). Such a legal entity may have been incorporated through a registration process established through legislation. Hence, an offshore firm is a legal entity which has registered its headquarters or subsidiary through the laws of an OFC. In his paper, he defines two types of offshore firms: Type I, which have headquarters registered in OFCs, while Type II firms have set up subsidiaries in an OFC (or in multiple OFCs) but have headquarters registered in 15 countries with the strictest legal regimes based on La Porta et al. (1998) (Austria, Australia, Belgium, Canada, Denmark, Finland, France, Germany, the United Kingdom, Japan, Netherlands, New Zealand, Norway, Sweden and the United States). Not all Type I offshore firms keep their headquarters in OFCs. About 53% of Type I offshore firms have headquarters registered and keep their headquarters in OFCs. The rest (47%) of Type I offshore firms have their headquarters in other countries or jurisdictions. After we control for the impact of OFC-registered and headquartered via OFC-registered but not headquartered of Type I offshore firms on financial reporting quality, the results are similar irrespective of the locations of offshore firms’ headquarters.

3 Offshore Growth

If we look at the anonymity of the offshore centres, world makes it difficult to track the flow of money. A study by James S. Henry, former chief economist at McKinsey & Company, estimates that wealthy individuals have $21 trillion to $32 trillion in 2013 in private financial wealth tucked away in offshore havens — roughly equivalent to the size of the U.S. and Japanese economies combined.

Even as the world economy has stumbled, the offshore world has continued to grow, said Henry, who is a board member of the Tax Justice Network, an international research and advocacy group that is critical of offshore havens. His research shows, for example, that assets managed by the world’s 50 largest “private banks” — which often use offshore havens to serve their “high net worth” customers — grew from $5.4 trillion in 2005 to more than $12 trillion in 2013.

3.1 Do OFCs make bad neighbors?

One might expect proximity to an OFC to be bad for the neighborhood, since OFCs encourage tax evasion and other illegal activities. However, the presence of nearby offshore financial centers may also have beneficial effects. Most importantly, the presence of an OFC with an efficient financial sector may increase the competitiveness of a source country’s banking sector, though this benefit is tempered by transactions costs.

3.2 Offshore bond issuance decision

The decision to issue in foreign currency or abroad is often affected by the desire to widen the investor base to include foreign investors. Thus the extent to which domestic markets are open to foreign investment is a critical factor in the domestic vs. offshore bond issuance decision. That withholding taxes are often a significant deterrent to investing in local markets for foreign investors, and thus can hinder the depth and liquidity of those markets, has been greatly emphasized by market participants in Asia (see Chan et al. (2011)). Similarly, the same report identifies restrictions on foreign investors investing in domestic bonds as a further area for market development. Where countries impede cross-border investment, they will enhance the offshore market. These factors are relevant to the static trade-off and the risk management theories as well as the market depth hypothesis, therefore we consider how the tax incentives for foreign investors affect the depth of the market, and its development. Chan et al. (2011) document that countries in Asia have varied the application of withholding taxes over time, and this potentially has an influence on the attractiveness of local currency bonds to foreign investors.

The third measure by Mizen, P., Packer, F., Remolona, E., Tsoukasp, S. (2012, p. 11) use to indicate market development is the scale of the derivatives market. The development of FX markets and derivatives in EMEs usually depends on the depth and liquidity of local debt markets as a proxy measure for the ability to swap easily in and out of the domestic and other currencies and has also been used as a market specific factor that might determine the extent of bond issuance. To the extent that firms can transform their interest payments on foreign (or domestic) bond issues into synthetic domestic (foreign) payments that can be serviced by domestic (foreign) cash flows, better developed swaps and derivatives markets could in principal enhance the growth of both foreign currency and domestic currency bond issues.

They combined these market-level data with firm-level data in an unbalanced panel for the eight countries (China, Hong Kong SAR, Indonesia, Korea, Malaysia, the Philippines, Singapore and Thailand) covering the period 1995 to 2007. They control for variables representing agency, static trade-off and risk management theories of the capital structure.

The question is: What difference have such reforms made to the actual financing decisions of firms in the region? Answers provided by Mizen, P., Packer, F., Remolona, E., Tsoukasp, S.(2012, p. 33-34) show that for many such borrowers, deep and liquid offshore markets have long provided financing for debt denominated in US dollars or euros. How do firms decide between offshore and onshore markets? Has the emergence of access to two parallel corporate bond markets changed the capital structure decision? More generally, do the observed choices between local and foreign currency shed light on the various theories of capital structure, including costly monitoring and agency theories, pecking order, market depth and risk management theories?

Their results provide the strongest support for the market depth hypothesis, i.e. the hypothesis that the choice of market will be determined to a large extent by the ability of the scale and depth of the market in question to accommodate borrower demands. Measures of domestic market scale and (relative) liquidity have a positive and highly significant impact on overall issuance, while measures which proxy for the probability of issuers overstretching local currency lending markets, such as firm size, leverage and long-term debt ratio, increase the likelihood of going offshore. The market depth hypothesis was also supported by the importance of the existence of a larger foreign investor base as well as the exemption of withholding taxes for non-resident investors. Issuers from countries with a large foreign investment presence are more likely to issue bonds, and more likely to do so onshore. Once the depth of the market was increased via withholding tax exemptions for non-residents, corporations were more likely to issue onshore as well.

Confirmation of the risk management theory – i.e. the hypothesis that firms that are more able to control the exchange rate risks should be more likely to issue offshore in a foreign currency – was evident based on tests utilizing data from a recently updated central bank survey on derivatives markets in different currencies. The size of currency hedging markets in each country – including FX swaps, currency swaps and options markets and other instruments covered by the BIS Triennial Survey – clearly increases the probability of issuance in foreign currency.

However, beyond investors and securities regulators, offshore firms’ financial reporting practices also preoccupy many government and public officials. From a public policy perspective, the opaque and poor financial reporting of many offshore firms has enabled them and their managers to evade paying taxes and to loot money from investors presented by Durnev, A., Li, T., Magnan, M., (p.3).

Therefore, we expect offshore firms to exhibit low quality financial reporting since managers have greater incentives to manage earnings in ways that mask diversion activities or hide poor performance (Kim et al. 2010).

Durnev, A., Li, T., Magnan, M., (2013, p. 5) describes that consistent with both the agency theory of tax avoidance and the quality of the legal environment, we find that offshore firms exhibit lower quality financial reporting through higher accruals management, lower accruals quality and less earnings persistence than non-offshore firms. Moreover, firms that have their headquarters registered in OFCs engage in more real earnings activities than non-offshore firms. In contrast, firms with OFC subsidiaries have less real earning activities than non-offshore firms.

If we focus on, The Offshore Attitude Index, definition is as follows – a comprehensive code of taxation, legal regimes, potential national benefits, political stability, and economic crime pollution for OFCs (Masciandaro 2008). Higher values of the Offshore Attitude Index for an OFC indicate more OFC-orientation (i.e., lower taxation, less potential national benefits and more flexible financial regulations).

4 Cost of outsourcing

There are costs to services outsourcing, and these costs are familiar from the literature on how trade in goods affects labor markets. While trade provides benefits for the nation as a whole, some people face dislocation. For example, workers with low skills within certain occupations such as data entry and low-end computer programming appear to have been affected by increased trade in services. The appropriate policy response is to help affected workers adjust to change rather than give up the gains from trade in the first place. Policies aimed at preventing trade, including outsourcing, would mean lower standards of living for both Americans and the citizens of developing countries.

Durnev, A., Li, T., Magnan, M., (2013) in their paper used a sample that includes firms that have their headquarters registered in 18 OFCs, firms that establish subsidiaries in OFCs but their headquarters are registered in 15 non-OFC countries with the strictest legal regimes, and firms without OFC operations from 37 non-OFCs. According their results, evidence shows that offshore firms engage in more accrual-based management, exhibit lower accruals quality and less earnings persistence than non-offshore firms. Firms that have headquarters registered in OFCs with a higher Offshore Attitude Index prefer accruals to increase their reported earnings but use real earnings activities as a supplement. Finally, using a U.S. sub-sample we distinguish that U.S. multinational firms with OFC subsidiaries exhibit poorer financial reporting quality compared to not only U.S. multinationals with non-OFC subsidiaries but also to U.S. domestic firms.

Zlate, A., (2010, p. 37) examines the effect of offshoring on the cross-country transmission of business cycles, while focusing on its extensive and intensive margins as separate transmission mechanisms. His paper considers a model of offshoring with heterogeneous .rms that is consistent with the empirical patterns of offshoring from U.S. manufacturing to Mexico´s maquiladora sector. First, following an aggregate productivity increase in the country of origin (North), the value added per o¤shoring firm jumps on impact and then returns to its initial steady state. However, domestic firm entry causes a gradual increase in the relative cost of fefective labor (i.e. the wage adjusted by aggregate productivity), which in turn generates a gradual increase in the number of offshoring .rms (the extensive margin), as in the data. Second, offshoring enhances the cross-country co-movement of output relative to the model with endogenous exports. The result is consistent with the empirical regularity documented in Burstein, Kurz, and Tesar (2009) that country pairs with larger shares of offshoring-related trade in bilateral trade also exhibit larger correlations of manufacturing output. Third, offshoring reduces the appreciation of the real exchange rate that follows an aggregate productivity improvement in the parent country, and thus dampens the Harrod-Balassa-Samuelson effect that occurs in the framework with firm entry and endogenously traded varieties.

There are a number of possible extensions to the model considered in this paper. First, the framework is useful to analyze the impact of offshore production on employment in the parent and the host countries. Second, a possible extension with rich policy implications would involve the study of interactions between offshore production and labor migration in a united framework, in which both offshoring and labor mobility are driven by flluctuations in the relative wage across countries. Third, while his paper studies the flluctuations of offshoring over the business cycle, further research should address the long-run developments in offshore production and its implications for U.S. manufacturing.

5 What includes offshoring?

Offshoring refers to the process of sourcing and coordinating tasks and business functions across national borders. Offshoring may include both in-house (captive, or international in-sourcing) and outsourced activities, which are delivered by an external provider – that is from outside the boundaries of the firm. Outsourcing, in turn, may occur both domestically (onshore) and abroad (offshore). Further, offshoring refers to sourcing rather than sales activities, and it supports global or domestic rather than local operations. It is not primarily intended for entering a foreign market nor for supporting the company’s local activities. For example, setting up HR (human resources) departments in foreign subsidiaries in support of local operations (e.g. sales and distribution) is not what we mean by offshoring. Only if HR services (e.g. payroll services) are provided from offshore in support of global or home-based HR functions, does the term ‘offshoring’ apply. Though it used to be limited to simple codified and repetitive tasks, companies are now offshoring increasingly complex and advanced activities requiring more and more qualified workers (Lewin and Peeters, 2006).

Lewin, A., Y., Massini, S., Peeters, C., (2008, p. 30-31) their empirical study reported in this paper brought together arguments of managerial intentionality, path dependence, and environmental effects to explain firms’ decision to offshore product development work. The results confirm that access to qualified personnel offshore is a strong determinant of such decisions, partly driven by a reduction in the supply of science and engineering talent in the US. The idea of cumulative experience building is also validated, although managerial intentionality seems to be a stronger determinant of PD offshoring decisions than firms’ past experience with offshoring. Among the strategic objectives that may lead firms to offshore, speed to market is a key factor underlying decisions to offshore portions of their innovation process. Conversely, firms with growth objectives are less likely to offshore PD. Finally, the study offers a clarification of the role of cost savings in explaining innovation offshoring. Firms do see PD offshoring as a unique opportunity to reduce the cost of their innovation activities partly through HBR strategies with labor arbitrage becoming a secondary driver. For small companies, access to lower cost S&E talent globally enables them to augment their limited in-house R&D resources (HBA strategies).

Their paper contributes to the debate about growing shortage of technical talent and globalization of human capital, by providing empirical support to the argument of an impending global race for science and engineering talent triggered by events such as the 2003 cutback in the H1B visa quota from 195,000 to 65,000 visas annually and the diminishing interest in entering the S&E careers as indicated by the decline in the number of US nationals earning advanced degrees in S&E. However, competing for science and engineering talent is unlike seeking markets or production platforms through FDI. Talent is different from other assets because it is highly mobile and because of high obsolescence. Accessing and managing talent in globally dispersed locations requires new recruiting and retention strategies as well as new organizational forms for managing, sharing, and exploiting knowledge. Although this paper sheds light on a few important questions regarding the determinants of firms’ decision to offshore innovation activities, we wish to acknowledge some limitations and future extension of the present research. First, although this paper provides an analysis of the influence of three types of factors on companies’ decisions to offshore product development, it is likely that these factors do not impact firms’ decisions independently of one another.

Ito, B., Tomiura, E., Wakasugi, R., (2007, p. 21-23) presented in their paper factors as follows. Noticeably more firms are outsourcing offshore, compared with five years ago, but still only around one-fifth of the midor large-sized firms are active in financial operations. Production-related tasks outsourced within East Asia occupy the major share in financial operations, while service outsourcing remains limited. In more than one-third of financial operations cases, tasks are outsourced to own offshore affiliates within the boundary of multinational firm. These may indicate still serious obstacles for active outsourcing, especially of service tasks, beyond the neighboring low-cost countries, or at the same time, unsolicited ample opportunities of global sourcing ahead of many firms. They pointed out that with respect to offshore R&D, the number of firms conducting offshore R&D are not large and different across industries. Electrical machinery and electronics, chemical, transportation machinery and general machinery are the dominant industries. The function of offshore R&D is not independent from headquarter. Two thirds of offshore R&D are incorporated in R&D at headquarter. The access to local market and the agglomeration of local firms and R&D institutions are major motivations of offshore R&D. We observe the high ratio of support-oriented R&D in every region as well as the high ratio of R&D collaboration in the U.S., EU and China. Most R&D are purposed to conduct the development, but one fifth is for conducting basic research in the U.S., EU and China. IPR protection is indispensable factor to determine the magnitude of offshore outsourcing and R&D. This survey presents how each firm perceives the protection of IPR in each country. The heterogeneous enforcement of IPR based on firm’s perception is useful to analyze how the corporate decision of offshoring is affected by the enforcement of IPR.

Paper of Ledyaeva, S., Karhunen, P., Whalley, J., (2013, p. 25-26) sheds light on a virtually unexplored phenomenon: round-trip investment from Russia to offshore financial centers and back to Russia. In particulart their empirically study the link between corruption and round-trip investment. Their empirical test is based on the firm-level data on foreign-owned firms in Russia obtained from Rosstat. Their main results can be summarized as follows.

First, they found quite robust evidence that round-trip investors tend to invest into more corrupt Russian regions than genuine foreign investors. Their result gives support for the proposition of laundering the proceeds of corruption via round-trip investment (in particular it’s high significance for the combined financial and real estate sector). It further indicates that round-trip investors may indeed be better equipped to cope with institutional deficiencies, e.g., corruption (in particular, the result`s significance in manufacturing sector). Second, they found evidence that round-trip investors invest more into regions with higher resource potential compared to their genuine foreign counterparts. Their finding indicates that round-trip investors are better able to exploit the business opportunities provided by the Russian natural resources than genuine foreign investors. This often requires allying with authorities, which is obviously easier for round-trip investors than for genuinely foreign investors. Furthermore, round-trip investors might be themselves the representatives of the authorities who already have access to resources. Finally, their results enable us to suggest that round-trip investors favor the development of the Dutch disease in Russia. In particular they are very highly concentrated in the service sector (real estate and financial activities, in particular), seem to aim at exploiting natural resources in Russia, tend to establish manufacturing firms in resource-based industries and support the development of corruption in Russia by investing into corrupt Russian regions. On the contrary, genuine foreign investments seem to work against the Dutch disease as they are more concentrated in manufacturing industries and regions with higher educational potential of population but are not tied to resource abundant and corrupt Russian regions.

Rose, A. K., Spiegel, M. M., examined (2006, p. 22) both the determinants of offshore financial centers and the consequences of OFCs for their neighbors. Using both bilateral and multilateral samples, we find empirically that successful offshore financial centers encourage bad behavior in source countries, since they facilitate tax evasion and money laundering. At first blush, it thus appears that OFCs are best characterized as “parasites,” since their attraction stems in part from allowing their source-country clients to engage in activities detrimental to the well-being of their homes.

Nevertheless, offshore financial centers created to facilitate undesirable activities can still have unintended positive consequences. In particular, the presence of OFCs enhances the competitiveness of the local banking sector. Using a model of a domestic monopoly bank facing a competitive fringe of OFCs, we demonstrate that OFC proximity enhances the competitive behavior of the monopoly bank and may increase overall welfare. This is true despite the fact that deadweight losses are borne when funds are transferred offshore to an OFC. They test these predictions using a multilateral data set, and show that proximity to an OFC is indeed associated with a more competitive domestic banking sector, and greater financial intermediation. They tentatively conclude that OFCs are better characterized as “symbionts.”

6 Offshore Centres in Slovakia

The largest absolute increase in 2013 reached the United States (99 new firms in OFC), Seychelles (40) and Panama (32). From a relative perspective was interesting countries such as Bahamas (+114%), Cayman Islands (+100%) and Panama (+ 52%). But it still decreases the number of firms with owners from Luxembourg (-38) and Cyprus (-12). “Unlike the Czechs, our entrepreneurs from Cyprus leave. They are affected by the crisis and unstable situation. Since the Luxembourg decided to alleviate its rules on banking secrecy and not to put more on the people who want to save on taxes for our business ceased to be attractive, “says current statistics Seliak Milan.

Conclusion

To a large extent, the issue of offshore outsourcing involves the same fundamental questions addressed by economists for more than two centuries concerning the impact of international influences on the domestic economy. To be sure, the world is different, as advances in technology have made it possible to trade a wider range of services. Services offshoring, however, fits comfortably within the intellectual framework of comparative advantage built on the insights of Adam Smith and David Ricardo. This is contrary to the assertions of some non-economists, who see a new paradigm created by improved technology and communications that somehow undermines the case for free trade.

References

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Courtney, T. B. 2002. The Law of Private Companies (2nd Edition). Bloomsbury Professional. 4.001
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Value of Gold

Cena zlata = a lot of articles has not been published since NO editor didn´t make job offer suitable for me.

Geopolitická a svetová ekonomická štruktúra prechádza zmenou, z čoho vyplýva, že investičné výhľady sú viac nepredvídateľné, ako je obvyklé. Z daného dôvodu investičné portfóliá by mali zahŕňať reálne aktíva, ako sú komodity pre ochranu pred potencionálnym poklesom na finančných trhoch s cennými papiermi.

Čo je zlato? Krátku definíciu objasnenú Lubbersom, E., kde zdôraznil, že zlato je považované za finančné aktívum, nie priemyselnú komoditu, ako ropa či meď. Z toho vyplýva, že väčšina fyzického dopytu o zlato je úzko spojená s investíciami ako sú zlaté šperky, mince a pod. V tomto svetle, je badateľný nárast v podobe ponuky zo strany centrálnych bánk, najmä na rozvíjajúcich sa trhoch, ktoré hľadajú spôsoby ako diverzifikovať ich spoločnosti, ktoré uskutočňujú transakcie v cudzích menách. Na druhej strane, malé množstvo zlata sa používa v priemyselných odvetviach, predovšetkým v kvalitných medicínskych zariadeniach či v leteckom priemysle. Taktiež je potrebné dodať, že nepatrné množstvo zlata sa využíva aj ako náhrada chýbajúceho zuba, čo vedie k skrášleniu úsmevu.

Zlatý štandard

Je potrebné uviesť, že Veľká hospodárska kríza, zdôraznila zlatý štandard. Kniha vydaná Barrym Eichengreenom v 1992 prezentovala, že zlatý štandard bol kľúčovým faktorom, ktorý ovplyvnil hospodársku krízu po celom svete. Dlhy z 1. svetovej vojny spôsobili, že medzinárodný finančný systém v roku 1920 oslabil, no skutočné problémy nastali až v polovici roka 1928, kedy USA a Francúzsko začali priťahovať veľké množstvo zlata z celého sveta. To spôsobilo, že centrálne banky stratili zlaté rezervy, ktoré potrebovali späť na krytie ich meny čo viedlo k reštrikcii monetárnej politiky. Okrem toho tieto obmedzujúce politiky viedli k nástupu celosvetovej deflácii v roku 1929.

Irwin, D. A. (2011) zdôraznil, že krajiny po vojne sa snažili znížiť infláciu a obnoviť menovú stabilitu, a tým aj položiť základy, ktoré by viedli k návratu k zlatému štandardu. Cassel predvídal, že riziko deflácie je úzko spojené s návratom k zlatému štandardu. Keď sa krajiny vrátili k zlatému štandardu, to spôsobilo fixáciu nominálnej ceny zlata pokiaľ ide o menu. V prípade, že dopyt po zlate sa zvýši, pevná nominálna cena by nemala byť prispôsobená. Inak povedané, skôr než porastie cena zlata, ceny ostatného tovaru budú musieť klesnúť, čoho výsledkom bude deflácia cenovej hladiny.

Preto hodnota zlata, teda udržateľnosť celkovej cenovej hladiny, na to, aby bola stabilná, zásoby zlata resp. ponuka zlata by musela byť v súlade v dopytom po zlate. Cassel, G. upozornil, že pokiaľ sa krajina vráti k zlatému štandardu, centrálne banky zvýšia svoj dopyt po zlatých rezervách, a to povedie k nárastu dopytu po zlate rýchlejšie ako samotná ponuka zlata, čím vznikne deflácia.

Z iného pohľadu, Hayek súhlasil s Cassel G., že zlé riadenie zlatého štandardu bolo zdrojom problémov vo svetovej ekonomike v dvadsiatych rokoch 20. storočia. Hayek ozrejmil, že ekonomický kolaps v 1929 bol nevyhnutným dôsledkom inflačného boomu vďaka lacným úverom, ktoré vznikli preto, že krajine sa nepodarilo dodržiavať pravidlá zlatého štandardu. Akýkoľvek pokus o zmiernenie bolesti dopadov s ďalšími inflačnými opatreniami by jednoducho viedli ešte k väčšiemu poklesu.

Inak povedané, tieto globálne toky ovplyvnili miestne politiky. Krajiny so zlatým štandardom slúžili ako dáždnik stability kapitálových tokov pre obchod s komoditami. Už v roku 1880, najväčšie krajiny sa snažili zbaviť striebra a bimetalových kovov a neskôr v roku 1900 krajiny ako Latinská Amerika, Ázia sa snažili urobiť to isté.

Aké závery je možno z toho vyvodiť? Po prvé, krízy boli všade prítomné, udalosti v období globalizácie predchádzali prvej svetovej vojne. Načŕta sa otázka či globalizácia bola primárnou príčinnou hospodárskej krízy. Je nutné uviesť, že prílev kapitálu ovplyvnili príčiny a dôsledky bankovej, menovej a dlhovej krízy. Tieto prílivy v spojení s ďalšími faktormi vytvorili finančnú krehkosť resp. zvýšený potenciál pre krízu.

Inak povedané, koncept peňazí, t.j. zlato a striebro v štandardnej hmotnosti a mince, umožnili svetovým ekonomikám rozšíriť a prosperovať. Počas klasického obdobia gréckej a rímskej vlády v západnom svete, za zlato a striebro dochádzalo k výmenám hlavne do Indie pre korenie a do Číny na hodváb.

Súčasná analýza

Podľa ročného reportu prezentovaného Scotia Bank, za rok 2014 najviac investícií smerovalo do Kanady a Kajmanských ostrovoch. Taktiež zaradili Bahamy, Bardados, Kajmanské ostrovy ako prvé podľa rebríčka Euromoney, z hľadiska prílevu súkromných investícií. Je potrebné dodať, že škótske fondy v Mexiku získali ocenenie ako najlepšie fondy publikované v Standard & Poor´s.

“Konkurenčný boj na trhu s ropou a železnou rudou spôsobil, že silný americký dolár oslabil zlato, a tým aj celkové ceny komodít v dolároch. Avšak, mierny rast cien ropy, na domácom aj medzinárodnom trhu, zdvihol všetky ceny v 2Q 2015,“ ozrejmila Patricia Mohr, viceprezidentka ekonómie a komoditný špecialista Scotia Bank. Taktiež dodáva, že ceny komodít na začiatku júla 2015 boli ovplyvnené obavami z gréckej dlhovej krízy a poklesu o 32% na akciových trhoch v Číne, ako aj prípadný návrat iránskej ropy na svetových trhoch.

Aktuálna hodnota zlata z dňa 29. júla predstavuje $1,090.25 za uncu, kým v roku 1970 bola hodnota $70, badateľný nárast o 557,5%. Kým v roku 2013 bola hodnota zlata na úrovni $1,204.50, v 2014 pozorujeme pokles o 4% na hodnotu $1,199.25 za uncu. Načŕta sa otázka aká je celková hodnota zlata po celom svete? Stručne $6,35 bilióna. Najväčší držitelia celosvetových rezerv v podobe zlata sú USA až 74%, Nemecko 68%, MMF, Taliansko 67% a Francúzsko 65% v 1Q 2015.

Podľa reportu World Gold Council, v 1Q 2014 bol rekordný dopyt pre čínske šperky, 236t, čo je veľmi vysoký benchmark. Na druhej strane, v 1Q 2015 Čína prekročila svoj päťročný priemer o 27%, z toho vyplýva, rastúci trend bude neohrozený. Zlato vyjadrené v tureckej líre vzrástlo v 1Q 2015, hlavne kvôli predaju mien investormi vzhľadom na ekonomické a politické záujmy. Rekordné ceny sa vyšplhali až na 85t zlata, nárast o 21% oproti 1Q 2014, z toho vyplýva, že zlato bude aj naďalej hrať úlohu likvidného aktíva, ktoré môžu investori ľahko predať v časoch ekonomickej tiesni.

Z pohľadu jednotlivých krajín, kľúčové Čína a India, v Indii sa zvýšil dopyt o 27t oproti 1Q 2014, dopyt po šperkoch poklesol vzhľadom na podmienky na trhu, ekonomický rast či fluktuácia cien. Dopyt po šperkoch v Číne poklesol o 10% oproti 1Q 2014, vzhľadom na spomalenie rastu HDP, situácia na akciových trhoch, opatrný výhľad cien zlata. Celkovo 620.2t zlata v 1Q 2014 držia investori po celom svete ako uvádza World Gold Council. Nízky dopyt po zlate resp. šperkoch je hlavne na blízkom východe, pokles o 31% oproti 1Q 2014 v Egypte, o 8% v Dubai či o 28% v Turecku. Celková ponuka zlata v 1Q 2015 je na úrovni 1,090t.

Investície do komodít, po globálnej finančnej kríze, dosiahli najvyššie ceny v roku 2011, ťahané hlavne dopytom zo strany Číny. Vzhľadom na dlhovú krízu v eurozóne a globálnu neurčitosť, v kombinácii s väčšou ponukou kovov a minerálov viedlo k poklesu cien komodít za posledné 3 roky.

Podľa prieskumu, ktorý uskutočnila PWC 2015, sa ukázalo, že 20% opýtaných spoločností vyjadrili súhlas, že cena zlata sa zvýši do 12 mesiacov, čo je pokles zo 47% oproti 2014 a 88% pokles oproti roku 2013. Podľa predikcií PWC sa cena zlata pre rok 2016 odhaduje na 1,280 USD za uncu. Čo sa týka nákladov, spoločnosti sa snažia znížiť náklady vzhľadom na nižšie ceny zlata. Na prieskum PWC 48% odpovedalo, že ich náklady sa znížia oproti 2014, 39% odpovedalo, že náklady ostanú na rovnakej úrovni a 13% odpovedalo, že ich náklady sa zvýšia. Spoločnosti sa snažia stabilizovať trh a získať dôveru investorov o komodity.

„V súčasných časoch, keď cena zlata sa kolíše smerom nadol, sú spoločnosti, ktoré sa snažia investovať do iných aktív, splatiť ich dlh, konať múdrejšie a produkovať viac peňazí,“ uviedol Graham, riaditeľ Harmony Golg Mining, jeden z najväčších producentov zlata na svete. Harmony uskutočňuje operácie v Južnej Afrike a v Papua Nová Guinei, kde vyprodukovali až 1,17 miliónov uncí zlata v roku 2014, 3% nárast oproti roku 2013.

Na záver, môžeme dodať, že investori, najmä na západe, budú stále investovať do kúpy zlata, nikdy nestratí na svojej hodnote. Taktiež sa vnára otázka, čo by mohlo zvýšiť záujem o zlato do budúcnosti? Jednoduchá odpoveď, monetarizácia zlata. Inak povedané, ak veritelia z rozvinutých krajín skúpia väčšie množstvo zlata, pretože sa boja nekrytých peňazí, potom ich dlh bude znehodnotený, tým pádom ceny zlata porastú. Čiže každý investor by mal mať vo svojom portfóliu zahrnuté investície do komodít. Inak povedané, koncept peňazí, t.j. zlato a striebro v štandardnej hmotnosti a mince, umožnili svetovým ekonomikám rozšíriť a prosperovať. Aj počas klasického obdobia gréckej a rímskej vlády v západnom svete, za zlato a striebro dochádzalo k výmenám hlavne do Indie pre korenie a do Číny na hodváb.

Offshore centers; Daňové raje

Perspektíva daňových rajov = Just an example of my style of writing for articles, research papers, case sudies learned by myself.

Keďže každý podnik má snahu dosahovať a maximalizovať zisky vo svojom podnikaní, má povinnosť odvádzať dane do štátneho rozpočtu, čo pre firmu znamená značný náklad. Z čoho vyplýva, že podniky hľadajú cesty ako znížiť náklady a minimalizovať daňové zaťaženie. Inak povedané, v súčasnej globalizícii sa krajiny snažia prilákať investície do svojej krajiny pomocou optimalizácie daňového zaťaženia osôb resp. spoločností.

Medzinárodný menový fond definuje offshore centrá (ďalej daňové raje) ako jurisdikcie, ktoré majú pomerne veľký počet finančných inštitúcií zaoberajúcich sa predovšetkým nerezidentmi, strediská, ktoré poskytujú nízke alebo nulové zdanenie, strednú finančnú reguláciu a bankové tajomstvo spojené s anonymitou.

Aký je počet slovenských spoločností v daňových rajoch?

Podľa poradenskej spoločnosti Bisnode, ktorá monitoruje 20 daňových rajov, na konci roka 2014 dosiahol počet 4 266 a medziročne sa zvýšil o 9,3 %, čo znamená nárast o 364 spoločností, o 152 spoločností viac ako v roku 2013. Badateľný nárast spoločností v 2014 o 49,89% v porovnaní s rokom 2010. Počet slovenských spoločností sa zvýšil v Spojených štátoch amerických, Paname, Luxembursku či Holandsku. Celkové aktíva 4 266 spoločností v daňových rajoch sú v hodnote 8,3 mld € v 2014, podľa aktív hlavne v Holandsku, Luxembursku a na Cypre.

„Krivka záujmu podnikateľov o daňové raje bola v roku 2014 veľmi dynamická. Zatiaľ čo v prvom polroku firmy s vlastníkom v daňovom raji pribúdali ako „huby po daždi,“ posledný kvartál došlo dokonca k poklesu celkového počtu spoločností,“ zdôraznil Milan Seliak z Bisnode. Je to možné pripísať aj vďaka tomu, že viaceré krajiny rušia bankové tajomstvo či dokonca zavádzajú zrážkové dane.

S rozšírením daňových rajov úzko súvisí korupcia, avšak pranie špinavých peňazí v daňových rajoch je aj naďalej z veľkej časti nepreskúmaný fenomén vo svetovej ekonomike, inak povedané round-trip investície, teda prevod finančných prostriedkov do zahraničia za účelom, aby sa reinvestovali niektoré alebo všetky investície do domovskej krajiny v podobe zahraničných investícií.

Už v dvadsiatych a tridsiatych rokoch 20. st. sa daňové zvýhodňovanie sústreďovalo v karibskej oblasti. Aké sú výhody využitia daňových rajov? Sú to predovšetkým daňová optimalizácia, ochrana majetku, utajenie informácií, obmedzenie zákonných povinností a nevyžadujú sa daňové priznania. Je dôležité uviesť, že investor taktiež zvažuje počet zmluv o dvojitom zdanení s rôznymi sadzbami v každej zemi alebo postoj k obchodovaniu s rezidentami. Z čoho vyplýva, že odlišné právne prostredie umožňuje založiť takú spoločnosť, ktorá by v inej krajine vôbec nemohla vzniknúť.

Pokiaľ sa zameriame na spoločnosti s daňovým zvýhodnením, je nutné uviesť, že poznáme nerezidentské a daňovo oslobodené spoločnosti. Nerezidentské sú charakteristické znížením alebo úplným odstránením daňových povinností s ohľadom na príjmy dosiahnuté mimo zemi svojho vzniku. Tieto typy spoločností sú najmä v Honkongu, Paname, Gibraltari, Kajmanských ostrovoch.

Čo prispelo k rozvoju daňových rajov? V každom prípade finančné centrá ako New York alebo Londýn. New York je často dávaný do súvislosti s rozvojom Kajmanských ostrovoch, Bermud či Baham. Na druhej strane, Londýn je často spájaný s rozvojom na ostrovoch Man, Jersey alebo Gibraltaru.

Kedy vznikali prvé nadnárodné spoločnosti?

S procesom globalizácie je spojený nárast vzniku nadnárodných spoločností. Už na začiatku 19. storočia vznikali v Európe podľa Michela Ghertmana (1996) dva typy spoločností, inak povedané „multinational corporations“ (MNC) alebo „transnational corporations“ (TNC), no významovo sa však nelíšia.

„Za nadnárodnú spoločnosť je považovaná každá spoločnosť so sídlom v jednej zemi a vyvíjajúcou stálou činnosťou pod svojou kontrolou najmenej vo dvoch ďalších zemiach, pričom v nich realizuje aspoň 10% svojho obratu. Spoločnosť vo svojej pôvodnej zemi sa nazýva materskou a jej pobočky sú zahraničnými filiálkami,“ uvádza Michel Ghertman.

Z toho vyplýva, že súkromné podniky, ktoré realizujú výskum, výrobu, predaj tovarov resp. služieb v rôznych častiach sveta sú považované za nadnárodné spoločnosti. Otázka znie, ako založiť pobočku resp. svoj vlastný podnik v zahraničí? Prostredníctvom priamych zahraničných investícií materského podniku vo forme akvizície t. j. odkúpenie alebo fúzie t. j. zlúčenie podnikov. Z geografického hľadiska, činnosť nadnárodných spoločností sa sústreďuje do oblasti Severnej Ameriky, Západnej Európy a Japonska.

V roku 2014 bol nárast o 169 nových spoločností v USA, v Paname sa zvýšil počet o 64 spoločností, v Luxembursku o 39 a v Holandsku o 30 podľa Bisnode. Najväčší záujem bol o Gibraltár, Panamu, Maltu a Lotyšsko z relatívneho hľadiska. Je potrebné uviesť, že klesol záujem investorov o krajiny ako Seychely či Cyprus.

Je dôležité uviesť, že význam nadnárodných spoločností stále rastie, lákavý faktor anonymity, podľa štúdie James S. Henry, bývalý hlavný ekonóm v spoločnosti McKinsey & Company, odhaduje, že 21 až 32 $ biliónov bolo v roku 2013 práve sútreďovaných v daňových rajoch, ekvivalent k veľkosti americkej a japonskej ekonomiky. Henry, ktorý je členom správnej rady pre daňovú spravodlivosť Network, výskum poukazuje, že aktíva spravované 50 najväčšími súkromnými bankami vzrástli z 5,4 $ bilióna v 2005 na viac ako 12 $ biliónov v roku 2013.

Čoho výsledkom je, že krajiny s nadnárodnými spoločnosťami stúpajú na ekonomickej sile, z čoho je zrejmé, že krajiny si môžu dovoliť vyberať podmienky pre svoju produkciu a zlacnieť tak výrobu. Z hľadiska šírenia technológií, výroby a výskumu, investície smerujú prevažne do rozvojových krajín, čo spôsobí zvýšenie zamestnanosti a zlepšenie sociálno- ekonomických faktorov v danej krajine.

Investori v roku 2014 investovali do základného kapitálu podnikateľských subjektov 8,4 mld € v oblasti obchodu, technických činností či nehnuteľností, ako uvádza Bisnode.

Ako môžeme jasne popísať daňové princípy? „Spravodlivosť, efektívnosť, pozitívne vplyvy na ekonomické správanie subjektov (t. j. daňové stimuly), správne pôsobenie na makroekonomické agregáty (t.j. makroekonomická pružnosť), právna perfektnosť a politická priehľadnosť,“ týchto päť kritérií dobrých daní uvádza Kveta Kubátová (2005).

Samozrejme dnešné daňové systémy a rôzne princípy vyplývajú už z historického vývoja. Ako prvé vznikali už v staroveku, resp. v stredoveku kedy sa začali formovať prvé panstvá a štáty. Čiže so vznikom štátu vznikli aj dane, ako príjem pre panovníka. Už Aristoteles v roku 300 p.n.l. sa venoval daňovej spravodlivosti a veľkosti daňového zaťaženia daňovníka. Neskôr Tomáš Akvinský v 13. st. poukázal, že daň je dobrovoľná lúpež pokiaľ je využívaná nepriamo t. j. neoprávnene pre panovníkove radovánky. Z iného pohľadu, Thomas Hobbes v 17. st. upozorňuje na princíp prospechu, t. j. dane sú protihodnota za služby poskytované jedincom štátom. Inak povedané, daň je cena za vykúpenie mieru v štáte.

Na dôležitosť daňovej konkurencie v oblasti medzinárodného obchodu poukázal už Adam Smith vo svojom diele s názvom Bohatstvo národov, kde uvádzal absolútne výhody, pri zohľadnení faktu, že jedna krajina je schopná vyprodukovať s rovnanými zdrojmi väčšie množstvo tovaru, za predpokladu, že štáty nezasahujú do fungovania tržného mechanizmu. Inak povedané názory liberalizmu a individualizmu. Komparatívne výhody boli prezentované neskôr Davidom Ricardom. Z čoho vyplýva, že jednotlivci majú svoje prirodzené práva a sloboda jednotlivca je tak predpokladom hospodárskej politiky.

Názory v oblasti daní sa neustále zdokonaľovali, Karel Marx upozorňoval, že redistribučná funkcia štátu závisí od typu hospodárského systému, čoho výsledkom je, že dane môžu plniť túto funkciu len v nepodstatných záležitostiach.

John S. Mill odporúčal, aby výška daní bola odvodená od schopnosti daňovníka dane platiť. Zdôrazňoval, že ľudia nie sú ochotní platiť za druhých, a preto je nutné zvoliť daňovú povinnoť podľa princípu rovnej obete. V súčasnej dobe známe pod názvom platobná schopnosť. Taktiež Arthur C. Pigou hľadal pomocou marginalistickej analýzy optimálnu veľkosť obetí jednotlivých daňovníkov.

V súčasnej dobe pozornosť ohľadom daňových rajoch je predmetom skúmania Offshore Investment, lídrom na trhu, journal je zameraný na investície v daňových rajoch pre spoločnosti, medzinárodných investorov a ich poradcov. Tento journal taktiež usporadúva rad konferenciíí, najbližšia sa uskutoční v septembri pod názvom The Oxford Offshore Symposium, kde sa stretnú odborníci z USA, Veľkej Británie, Írska, Indie, Švajčiarska, Kajmanských ostrovoch, Lichtenštajnska. Tento journal poskytuje a monitoruje informácie o 23 daňových rajoch po celom svete.

Autor:

Ing. Antónia Ficová

Working papers and PPTs

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Table of Content

Introduction

1 Consequences of Crisis

2 The Casy study of Greece

3 Economic Crises

Viewed in this light, prospect we demand once more the adoption of common European economic, fiscal and social rules as an effective barrier to the uneven growth of the Eurozone. Those opposing such strategy are those of neoliberal aspirations or those advocating economic nationalism.

However, financial crisis struck, particular stresses within the Eurozone derived from: a) overly cheap credit; b) the bursting of a generalized property bubble; and c) huge variation in productive efficiencies and, therefore, competitiveness across the Eurozone.

4 The synchronisation between EU stock market

Nevertheless, their analysis provides an estimate that may be interpreted as a lower bound of the overall macroeconomic impact of the unconventional monetary policy measures considered.

5 SMP, LTROs, OMTs

6 Self-fulling debt crises

6.1 Debt intolerance, defaults, crisis

Conclusion

References

Aguiar, M., Amador, M., Farhi, E., Gopinath, G., (2013) Crisis and commitment: Inflation credibility and the vulnerability to sovereign debt crisis, Working Paper 19516, National Bureau of Economic Research, http://www.nber.org/papers/w19516

Al-Saffar, Y., Ridinger, W., and Whitaker, S., (2013), The role of external balance sheets in the financial crisis, Financial Stability Paper No. 24 – October 2013, Bank of England, ISSN 1754–4262

Beirne, J. & Fratzscher, M. (2013). The pricing of sovereign risk and contagion during the European sovereign debt crisis. Journal of International Money and Finance, 34, 60-82.

Blundell-Wingall, A., Slovic, P. (2010) “The EU Stress Test and Sovereign Debt Exposures.” OECD Working Papers on Finance, Insurance and Private Pensions, p. 4

Candelon, B., Palm F.C. (2010) „Banking and Debt Crises in Europe: The Dangerous Liaisons?“, CESifo working paper Fiscal Policy, Macroeconomics and Growth, 3001, available at: http://hdl.handle.net/10419/38910

Gómez-Puig, Marta and Sosvilla Rivero, Simón, Causality and Contagion in EMU Sovereign Debt Markets (February 3, 2014). Research Institute of Applied Economics Working Paper 2014/03. Available at SSRN: http://ssrn.com/abstract=2405929 or http://dx.doi.org/10.2139/ssrn.2405929

Hofmann, Ch. (August 1, 2012) „The Euro Zone Crisis“, available at SSRN: <http://ssrn.com/abstract=2121499>

Masson, P. (1999) ‘Contagion: macroeconomic models with multiple equilibria’, Journal of International Money and Finance, 18(4), 587-602.

Pappas, Vasileios and Ingham, Hilary and Izzeldin, Marwan and Steele, G R, Financial Markets Synchronization and Contagion: Evidence from CEE and Eurozone (October 1, 2013). Available at SSRN: http://ssrn.com/abstract=2411978 or http://dx.doi.org/10.2139/ssrn.2411978

Reinhart, C. M., Rogoff, K. S., (2010), From financial crash to debt crisis, Working Paper 15795, http://www.nber.org/papers/w15795, National Bureau of Economic Research

Sakellaropoulos, Theodoros D., Debt Crisis and the Welfare State in Greece (2012). Global Dialogue, 2012. Available at SSRN: http://ssrn.com/abstract=2424081

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Introduction

1 What are Offsshore Centres?

1.1 Offshore Corporate Governance in Practice

1.2 Ownership of Voting Shares

2 Transfer Pricing

3 Offshore Growth

3.1 Do OFCs make bad neighbors?

3.2 Offshore bond issuance decision

4 Cost of outsourcing

5 What includes offshoring?

6 Offshore Centres in Slovakia

Conclusion

References

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Cena zlata = a lot of articles has not been published since NO editor didn´t make job offer suitable for me.

Zlatý štandard

Súčasná analýza

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Perspektíva daňových rajov = Just an example of my style of writing for articles, research papers, case sudies learned by myself.

Aký je počet slovenských spoločností v daňových rajoch?

Kedy vznikali prvé nadnárodné spoločnosti?

Investori v roku 2014 investovali do základného kapitálu podnikateľských subjektov 8,4 mld € v oblasti obchodu, technických činností či nehnuteľností, ako uvádza Bisnode.

Názory v oblasti daní sa neustále zdokonaľovali, Karel Marx upozorňoval, že redistribučná funkcia štátu závisí od typu hospodárského systému, čoho výsledkom je, že dane môžu plniť túto funkciu len v nepodstatných záležitostiach.

Autor:

Ing. Antónia Ficová

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If you are extreme reader check on following website and following song:

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