Bond vigilante and PANA inquiry: Difference between pages

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imported>Doug Williamson
(Create page - source - Reuters - https://www.reuters.com/markets/europe/bond-vigilantes-mean-business-governments-better-beware-2022-10-17/)
 
imported>Doug Williamson
(Update secrecy haven to secrecy jurisdiction.)
 
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''Risk management - central government borrowing - inflation risk - bonds.''
An inquiry established by the European Parliament to investigate money laundering, tax avoidance and tax evasion, following the Panama Papers disclosures of 2016.


A bond vigilante is a holder of long dated central government debt that sells - or threatens to sell - their holdings as a response to increased inflation risk.
The inquiry's recommendations, published in 2017, included:


If inflation were to be higher, then the redemption value of the long dated debt would be lower, in real (inflation adjusted) terms.
*Introducing a regulatory framework for tax intermediaries (such as lawyers and accountants), including the separation of audit, tax and advisory services.
 
*Defining effective sanctions in the case of involvement in illegal tax and money laundering schemes.
The longer dated the debt, the greater the effect on real terms values.
*Providing a common definition at EU level of a certain number of concepts, such as tax haven, secrecy jurisdiction, non-cooperative tax jurisdiction and high-risk country, as well as guidelines on illegal vs. legal tax planning activities to improve legal certainty.
 
*Implementing effective protection measures for whistle-blowers.
 
Selling bonds in this way results in their prices falling, and the cost of borrowing for the government to rise, expressed in rises in the yields on government debt.
 
 
:<span style="color:#4B0082">'''''Bond vigilantes mean business, governments better beware'''''</span>
 
:"The sight of Britain's new finance minister shredding up his leader's economic policies on Monday [17 October] illustrated something very clearly - bond market vigilantes are back, they are bold and governments had better pay attention.
 
:It took just three weeks for markets to force the UK, the world's sixth largest economy and issuer of one of its reserve currencies, into its screeching U-turn...
 
:'It is really not the right time to experiment with fiscal policy,' AXA chief economist Gilles Moec said about the UK's moves, assessing that Monday's U-turn may have appeased 'the bond vigilantes for now'.
 
The term, bond vigilantes, refers to debt investors imposing fiscal discipline on profligate governments by forcing their borrowing costs higher."
 
:''Reuters - 17 October 2022.''




== See also ==
== See also ==
* [[Bond]]
* [[Anti-avoidance provision]]
* [[Fiscal policy]]
* [[European Parliament]]
* [[Gilts]]
* [[High-risk country]]
* [[Hedging]]
* [[Non-cooperative tax jurisdiction]]
* [[Inflation]]
* [[Panama Papers]]
* [[Inflation risk]]
* [[Paradise Papers]]
* [[Real terms]]
* [[Secrecy jurisdiction]]
* [[Reserve currency]]
* [[Tax evasion]]
* [[Risk management]]
* [[Tax haven]]
* [[Yield]]
* [[Whistle-blowing]]
 


==External link==
*[https://www.reuters.com/markets/europe/bond-vigilantes-mean-business-governments-better-beware-2022-10-17/ Analysis: Bond vigilantes mean business, governments better beware]


[[Category:The_business_context]]
== External link ==
[[Category:Identify_and_assess_risks]]
[http://www.europarl.europa.eu/cmsdata/134370/Draft_Recomendation_B8_660_2017.pdf Draft recommendations of the PANA inquiry 2017]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Financial_products_and_markets]]

Revision as of 15:18, 8 April 2018

An inquiry established by the European Parliament to investigate money laundering, tax avoidance and tax evasion, following the Panama Papers disclosures of 2016.

The inquiry's recommendations, published in 2017, included:

  • Introducing a regulatory framework for tax intermediaries (such as lawyers and accountants), including the separation of audit, tax and advisory services.
  • Defining effective sanctions in the case of involvement in illegal tax and money laundering schemes.
  • Providing a common definition at EU level of a certain number of concepts, such as tax haven, secrecy jurisdiction, non-cooperative tax jurisdiction and high-risk country, as well as guidelines on illegal vs. legal tax planning activities to improve legal certainty.
  • Implementing effective protection measures for whistle-blowers.


See also


External link

Draft recommendations of the PANA inquiry 2017

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