Shadow Europe: Alternative European Financial Geographies

Abstract

This paper sets out to trace some major points of convergence between an emerging literature on the political geographies of corruption-super-1 and current attempts to develop a renewed research agenda in the geographies of global finance-in this case in a specifically European context. In particular, we offer some preliminary observations on the need to elaborate an alternative geography of Europe's financial architecture that could incorporate the role of flows of illegal and informal finance as major driving forces behind the way in which that architecture currently constitutes itself. This is an inherently complex task due to the intrinsically hidden nature of these flows and the difficulties involved in their accurate measurement; nevertheless, they are too important to be ignored, as is too frequently the case at present. In the paper we offer some necessarily preliminary, and deliberately provocative, reflections on how to take forward such a re-conceptualisation. Ultimately, our analysis revolves around the identification of an uneasy tension between the demand for deregulated financial markets and the increasing integration of those markets, and the international momentum towards finding ways of dealing with the (apparently) ever-increasing problems of corruption, money laundering, and the financing of terrorism through new forms of financial regulation and control. Copyright 2007 Blackwell Publishing.

Offshore Foreign Direct Investment, Capital Round‐Tripping, and Corruption: Empirical Analysis of Russian Regions

“…corruption can be safely laundered in OFCs (Roberts 1994;Hampton 1996b;Christensen 2012; see also Brown and Cloke 2007). We argue that part of round-tripping behavior has an illicit nature, including regulatory arbitrage with the aim of consciously circumventing domestic regulation and fiscal arbitrage in the form of tax evasion.…”

“…In contrast to the supporters of OFCs, who base their arguments on the neoliberalist idea of the economic harmfulness of the regulation of international capital flows (Cooper ; van Hulten ), the critics of OFCs point to problems, such as tax evasion and money laundering, which OFCs make possible by the lack of transparency, regulation, and secrecy (Gonzalez and Schipke ). In particular, it has been recognized that legalized secrecy provides a supply‐side stimulus for corrupt practices, as proceeds of corruption can be safely laundered in OFCs (Roberts ; Hampton 1996b; Christensen ; see also Brown and Cloke ).…”

Geographies of the illicit

“…This is because it is argued that they form an empirically significant set of economic activities that are largely overlooked in geographical discussions of the contemporary global economy. This can be seen as part of an emergent effort by geographers to make visible opaque economic activities of all kinds, including those of businesses and states (Brown and Cloke, 2007;Cook, 2012).…”

Speaking in riddles: The Panama Papers and the global financial services sector

“…On the cusp of the global financial crisis (GFC) in 2007 a paper appeared in Growth and Change entitled “Shadow Europe: alternative European financial geographies” (Brown & Cloke, ). The paper contributed to a trend in analysis focusing on geographies of corruption and was intended to make a set of proposals for future research into the financial services sector to add to the wider debate on corruption.…”

“…Even more in 2017 than in 2007: “Strategically important flows of capital derived from complex underground production systems that have seldom been analyzed in detail move through the European financial networks that connect to offshore tax havens (Christensen, )” (Brown & Cloke, , p. 319). Far more research into OFCs is urgently needed and will be vital in mapping topological understandings of globalisation through dependent financial services relationships, but more essentially in understanding how financialising capitalisms themselves evolve as social network systems.…”