Global Bank Stocks Tail Risk Rises On Panama Papers’ Dump

The Panama Papers controversy, the leaking of nearly 11 million documents from a Panamanian law firm, shows how the world’s economic political elite break the law to evade taxes. This is likely to increase “tail risks” for global banks, a Nomura report predicts. But in the end, institutions “most vulnerable to adverse outcomes” are those that oddly “have proven resilient” to any criminal prosecution or even investigation. Nonetheless, investors should be cautious of additional big bank fines where shareholders pay for executive's illegal behavior.

The Panama Papers report comes as Phil Angelides, former head of the U.S. Financial Crisis Commission, claims on CNBC that their agency provided information to the U.S. Department of Justice for potential prosecution...