Governments running large welfare states have long resented tax havens, which reduce their tax take. In recent weeks, some people have managed to sell the idea that in response to the global financial crisis, governments need to crack down on tax havens. I, for one, don't see any link between tax havens and the problems of the global financial system.
Writing in Financial Express a few weeks ago, Avinash Persaud had an eloquent argument about the critical role that tax havens play in enabling multinational corporations and thus globalisation. His description of the tax haven as a tax-efficient `junction box' for a multinational corporation reminded me of the role of securitisation SPVs as junction boxes for financial contracts.