Bad week for big banks as tax haven discussion hits at same time as fine levied for lack of disclosur
It has been a rough week, reputationally for Canadian banks, but fundamentally they remain among the world’s best. (Mark Blinch/Reuters)
Royal Bank of Canada CEO David McKay said at the bank’s annual general meeting in Montreal on Wednesday that the bank is currently combing through its records to see what ties the bank may have to Panamanian law firm Mossack Fonseca, which is at the heart of the current banking secrecy scandal.
On Monday, RBC was implicated in the Panama Papers scandal when documents in the leak unearthed that the bank had created at least 370 foreign corporations on behalf of its clients via Mossack Fonseca over the years.
While there’s nothing illegal in and of itself from setting up a foreign bank account, such vehicles can be used to evade taxes, as opposed to avoiding and minimizing them via legitimate means.
McKay said he is unhappy the bank’s name has been “dragged into” the controversy involving offshore tax evasion allegations, especially considering that there is no evidence to suggest the company has done anything illicit.
“As a CEO, I have to be concerned about our brand and reputation, particularly in a situation where there’s absolutely no allegation of wrongdoing,” McKay said.
“We just happen to have a couple hundred files, going back 40 years, that are attached to this legal firm,” he said. “That’s all that’s been reported.”
