Excessive financial secrecy facilitates illicit financial flows, including via anonymous ownership of cross-border financial assets. We study the reaction of such investment to recent increases in financial transparency using a new dataset of financial secrecy for 2011-2019. We find that investors reacted by relocating their assets to jurisdictions that remain, or have recently become, relatively more financially secretive than other countries. These effects are highly non-linear and stronger for assets originating from lower-income countries. Our results suggest that recent advances in information exchange are toothless if not accompanied by improved information collection and full corporate beneficial ownership transparency.

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