The world's hidden money

Secret Money: The World of International Financial Secrecy, by Ingo Walter. Lexington, Mass.: Lexington Books. 213 pp. $19. The siphoning of Philippine funds by Ferdinand Marcos, purportedly involving billions of dollars, serves to highlight the murky world of international financial secrecy. Ingo Walter, a professor of economics and finance at New York University, attempts to sketch this world despite limited information. He describes it in economic terms as a competitive industry that produces a variety of services to meet the demands for capital flight, tax evasion, smuggling, fraud, and money laundering.

The economic effects of this secret money have substantial effects on national income, balance of payments, and international trade. Secret money also has important social and political effects, such as supporting terrorism and insurgencies. Mr. Walter glumly concludes that public policies designed to cope with this problem are often confused or ineffectual, and that international cooperation in reducing secret money flows will continue to have a spotty record at best. Perhaps the Marcos case might encourage some greater progress in fighting this pervasive and too-often-ignored problem.