What is the impact of the Panama Papers on global markets?

Pisani: Too soon for Panama Papers effect

I was asked several times over the weekend what the implications of the Panama Papers were for global markets. The short answer is I don't know, but there are several implications for the markets that need to be considered.

1) More bank regulatory scrutiny? To the extent that banks were facilitators of these offshore accounts, it would add impetus to more regulatory scrutiny.

2) More scrutiny by U.S. prosecutors of foreign banks? It looks like several subsidiaries of European banks were among the more active creators of these offshore accounts. U.S. prosecutors have already initiated fines and sanctions against foreign banks for violations of U.S. laws. This may provide additional information for even more scrutiny.

3) More regulation/taxation in general? This will provide even more ammunition to those on the more hawkish side of regulatory and tax issues — Sen. Elizabeth Warren of Massachusetts is a good example — who will use this to argue for even more bank regulations and higher taxation of the wealthy.

By the way, while much of the focus appears to be on political figures hiding (potentially) ill-gotten gains, it appears that one of the most common uses of these accounts is for a much more mundane purpose: to hide assets due to a divorce settlement.