In normal times it may not be binding – the acid test is whether a bank otherwise complying with Basel II will be limited by this ratio in good times, so that it does not leverage excessively and result in shortage of capital in bad times. It would put a floor under the build up of excessive leverage.
According to Gabriel Zucman, 8% of the world’s total household wealth, which is USD 7.6 trillion, was in tax havens in 2016 – according to Zucman’s conservative estimates, 75% of these funds are derived from illegal tax evasion.5 In 2009, the G20 took action and compelled tax havens to sign bilateral treaties providing for the exchange of bank information.