 Yeah, this paper here is joint work with Niels Johanesen and Daniel Weisshaar and it is called Homes Incorporated Offshore Ownership of Real Estate in the UK. So we are looking at a specific example of a potentially illicit financial flow here. And the title speaks, so I really want you to think about homes, meaning residentially used properties, flats and houses, incorporated meaning held through companies. We have a lot of anecdotal evidence. Journalists have been doing their job about real estate markets and foreign investors in them in large cities. And there is a lot of concern here that there are illicit funds in these type of investments. Money laundering, capital flight, including from less wealthy economies, offshore tax evasion. But also, and this is where an illicit flow might link both the center and the receiving country broader effects on real estate markets. For example, these kind of flows might exacerbate price bubbles in OECD capitals. And then, of course, there's the problem that the international investor might not have the same motives as the host city when it comes to providing accommodation, for example. So there are a lot of concerns why international real estate investments, especially when they come through tax havens, could be problematic, but there's very little quantitative evidence about that. Now, Britain is an interesting case study to look at international real estate investment, A, because London has been such a popular safe haven for international capital flows. And, you know, there's a lot of news out there saying that London real estate is a very popular investment destination. But also, they have pretty good data on real estate. Here you see a graph that you might see in the BBC or in the Guardian of the top 10 investing countries in British real estate, when we just count and percent the number of real estate titles or the registration numbers in Britain, right? And you see immediately something a bit suspicious. I'm not waiting at all here, right? So Norway, Germany, France will be on this list at some point. But the top investing countries, British Virgin Islands, Jersey, Guernsey, Isle of Man, Luxembourg, you get the idea, right? These are all tax havens. And the point of this paper is to help you understand this graph better. We want to explain what this market actually looks like in market sizes, including prices. We want to understand who's actually behind this, why are they doing it, and what is the impact on the host city. Skip a few things in the interest of time. And in order to do that, we have started a big data effort that I want to walk you through, because it might be interesting also for other people working on illicit flows to see how you can get at these questions. The starting point is a large data set of 25 million residential real estate transactions in Britain, right? So since 1995, Britain has recorded every residential real estate transaction. And this might give you something like an address, 35 miles drive sold for 250,000 in 2017. More 34 to 37 nursery road here, you already start to see that a land title can be more than one address. And Birmingham sold for close to a million in 2019. Now that's a very nice data set, but it doesn't tell us anything about ownership. The next thing we grab is something called the Domestic Companies Register, which might include a registration of an owner if you're lucky you find the same address. And here we see that this address, or 35 miles drive, is of course included from 2029 to 39. Here we find out that this was registered with Obscura One GR Limited, incorporated in the United Kingdom also in 2017. That's the domestic investment, a British firm. They have the same data set for foreign investment. The overseas companies register. And here we might find our address again, the nursery road one in Birmingham, where we find out that this is actually registered with ASBJ International Limited in the British Virgin Islands. This foreign company data set includes tax-saving investment and non-haven investment, but non-haven investment is almost negligible, as you will see, right? Now that's what we call homes incorporated, where we have the prices and we have the owners. The problem here is, of course, Obscura One GR Limited might not be British owned, right? It's well possible that this company is simply set up to buy this real estate and is actually owned from abroad. So here we employ the Orbis database, the largest database available to look through international ownership structures and we update this information. And again, we find Obscura One GR Limited and we find out that its ultimate owner is actually in the British Virgin Islands. That's the indirect ownership, all right? Okay, so that's our data set. And I want to show you what this market looks like in a few graphs. There are more in the paper, but I can't go through all of them. The first thing to note is that now that we have prices and owners, we can use regional price indices of these purchases to just at any point in time tell you what is the offshore market in Britain? What is held from which country? And that's what we're showing you here. So we're jumping to the end of December 2019 before the COVID pandemic and we just look at how has this market accumulated for different countries. And now you see it plotted in billions here. And you see, yes, the British Virgin Islands, Jersey, Guernsey, Luxembourg, 93% of foreign corporate investment, both indirect and indirect, comes from tax havens. There are some non-havens here down the list, but that's being a bit generous to the United States and Qatar, debatable. But tax havens dominate foreign real estate investment, right? Now, the total market share might not seem drastic. These are all lower bound estimates because whenever we don't match anything in our data, we just, whenever there's the slightest hint that there might be a problem in the match, we don't match, right? So these are all lower bound estimates and then future iterations we'll make an upper bound too, but look at this as the lower bound. The total market share is at around 1.25%, that includes, of course, every village in Wales. But then as you move through price bins, as you look at the cheapest properties up to 100,000 pounds, up to 500,000 pounds, 1.5 million, 5 million, more than 5 million, which isn't that expensive in London, these market shares go up immensely, right? And in the top market share here, we have a market share of more than 15%, only corporate investment from tax havens. This investment has been increasing relatively quickly, relatively recently, right? So it has increased much later than financial assets in tax havens, for example, so it's a much newer phenomenon. And if we compare... Oh, sorry, no, I took that out of time, okay. So it's distributed in high price segments mostly, and it has increased relatively quickly, relatively recently. Geographically, that's the graph that's missing, it is concentrated in London mostly, but there is some music in the rest of the UK as well. So maybe some interesting work to be done there. So you all don't believe that these are the actual owners, right? So who's behind this? Now remember, both in the direct investment and in the indirect investment, we got stuck in a tax haven, right? We got stuck in the British Virgin Islands. And here's where we employ these ICIJ leaks, right? So by now, 810,000 shell companies of all these different leaks over time. And if we find the same company that we got stuck with in the tax haven, in the same country, in those leaks, then we match it through, right? And then we can go from the house, from the property, through the international ownership chain to the beneficial owner. That only works for a subset of our data, but we do match 9,000 individuals to 12,000 properties, so it's not nothing. It's a sample. We draw some bootstrap samples from it. The details are in the paper. And let's have a look at that country distribution of these beneficial owners. We make sure they're natural persons and we make sure we only look at shareholders and beneficiaries. Here's the country distribution of that. Some we can't distinguish, right? We can't tell you if Cyprus is bigger than China, but some we can. We can tell you that the UK is its largest foreign investor in real estate. So, you know, it's 15%. It's not the majority of the British investment, but it is substantial. So there's some roundtripping in this data. And then we have the United Arab Emirates, South Africa, Hong Kong, Saudi Arabia, Malaysia. So, mostly former colonies or oil-rich economies. And this also shows you tax haven secrecy can be pierced, to some extent, with a lot of work. This ownership structure is interesting if you compare it to other tax haven assets. Here is a comparison where we, in the dark gray plot, sorry, in the light gray, we plot the Swiss deposits from the Swiss leaks. In the Swiss leaks, HSBC ultimate owners of bank accounts were leaked. And we just look at the country distribution. You see this is dominated by Europe, North America, then South America, Middle East, right? So, mostly the wealthy economies were exposed in the Swiss leaks. A lot of the financial wealth in tax havens seems to come from rich economies. This is not the case for our British real estate investments, thank you. There, you see Africa, Asia, and the Middle East being overrepresented compared to developed economies, or to richer economies. And that links back to this illicit capital outflow story that these international real estate investments might be a vehicle for a capital flight from developing economies. And also links together, both sides, the developing economy, where this money comes from and the developed economy, where it does something in the market. We have a whole section in the paper where we check why people are doing this kind of stuff. I don't have time to go through it, but we find evidence of a tax planning motive. So when the capital gains tax changes, people change their investment behavior. And we find evidence of a secrecy motive. So when Britain introduces transparency regulation on some of these tax havens, suddenly the investment moves elsewhere, more in the paper. What I quickly want to show you is evidence of consequences. Does any of this matter for the host city? And here we go back to London. And we separate London into 983 little areas which have a different pre-Brexit market share of foreign investors. And then we use Brexit as our policy shock to see how properties in these different areas behave after Brexit takes place, because Brexit was associated with a capital flight. So after Brexit, foreigners start selling properties, and they stop buying properties. So capital is leaving Britain and the British real estate market. And when we control for a bunch of things, like, for example, different price bins, we can compare similar properties that are of a similar price, but that are in areas that used to have a lot of foreign capital compared to areas that have little foreign capital and see how their relative price develops. And that's what we're doing in this empirical exercise. And here you see that you don't see any action before Brexit, but as Brexit happens and as capital moves out of the UK, all of a sudden prices in areas that used to have a lot of foreign capital decline relatively. So if you take this foreign capital out, prices decline, which also tells you that as more and more capital moves into a market, prices will increase. The effect is immediate and persistent. So we don't see a recovery here, at least until 2019, where we cut our sample. And then, depending on how brave you want to be about the assumptions, you could say, OK, let's assume this effect is linear. Let's assume there's no construction response. Let's assume there's no substitution, and so forth. And then you could make statements to give you an idea of the size of the effect, like Westminster without offshore capital would have at least 16% lower prices. Liverpool with Westminster's offshore market share would have at least 13% higher prices. So there is a price effect. The rest of our work is then trying to figure out is something that's not offshore investment driving this price effect. Is this distribution here just capturing corporate investment? Or is this just migration responses when people move out after Brexit and they sell their house? Are there other area level controls that could be driving this? Are these different properties and property characteristics? And I can't walk through all of these results, but they are in the paper. If you're interested, please have a look. I do want to show you two last things. The first thing is, thank you, I showed you that a lot of the, or a substantial part of the tax-saving investment into British residential real estate is British. So are the Brits driving their own price effect? Or is it the true foreigners? Now our matched sample that we can look through in the ICIJ League isn't huge, right? But it's big enough to assign country probabilities. So we'd say something like 93% of the investment from Hong Kong has ultimate foreign owners, 7% of investment from Hong Kong has ultimate British owners. So we'll take all the investment from Hong Kong, we put 93% of it into the true foreign bin, we put 7% of it into the true British bin, we do that for every country, and then we have a true foreign offshore market share and a true British offshore market share. And we throw both of these in the equation, and here you see the results. So it is not the Brits. They've coefficient is negative here, but very noisy. It is the true foreigners that are driving this investment response. And lastly, we were thinking, have we just discovered very wealthy people kind of playing casino with each other, and there's above 5 million price group? Or does this price effect actually spill over into middle-class property markets? And so what we do here is we separate our offshore market share into expensive properties, more than half a million, and cheap properties in London, less than half a million. But we only look at properties that are worth less than half a million to see if both actually matter. And that's what you see in the last column here. Yes, your own offshore market share matters, but also the high price segment has an impact on middle-class properties. All right, that's the project. So my goal was to help you understand this graph a bit better that we started with. I told you what this market looks like, some facts about who's behind it, not so much about why people are doing that, but a bit more about what's happening because of it. Thank you very much for the attention. Thank you. Thank you very much.