Eli5: How do secret banks accounts work?

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From watching TV shows and movies, it looks as though you have ‘papers’ of the bank account. And usually, for dramatic effect, the papers are burned or destroyed somehow. Does this mean that their money is now lost?

And what makes it secret? Is it not in your name? If so, how do you prove its yours or have access to it? And why are they always in somewhere like the Cayman Islands?

I feel like TV shows and movies throw together plotlines about secret bank accounts constantly but I have no idea how they work.

In: Economics
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I do know super rich people keep back accounts in places like the cayman Islands because it’s apparently easy easier to get around us tax laws there. I’m not sure exactly how though.

The secret element is that the banks can’t be forced to reveal who holds the bank account to foreign governments, so criminals and others can “hide” money in them.

There are countries (like The Cayman Islands, The Maldives, and Macau) where bank accounts are identified by number and not by the owner. There are also law firms that specialize in starting companies and bank accounts for said companies in order to shelter the money in those bank accounts from government investigation and taxation.

I recommend that you watch The Laundromat on Netflix for an entertaining explanation of those law firms.

It used to be that a lot of banks would allow you to open accounts and make deposits without providing any sort of identity. They would give you an account number and you’d pick some sort of password to gain access. If those were lost then the account was lost. The banks wouldn’t report on who held those accounts to the local governments.

This allowed a LOT of money to be hidden.

But the world has been going through changes. Know Your Customer laws have been passed in the US, Europe, and many other places. These laws demand that those banks know exactly who they are doing business with *and* to share that information with governmental authorities. This means it is becoming far more difficulty for people to hide money. The next wave of this is going to squeeze businesses who have traditionally done the same things.

I’m not sure if this is what you’re talking about, but one thing I see a lot in movies are [Bearer Bonds](https://en.m.wikipedia.org/wiki/Bearer_bond).

Bearer bonds are promissory notes, kind of like cash, but can be issued by companies. They are not held under a name or registered, whoever “bears” them can cash them in. They can be worth cents or millions of dollars.

Is that similar to what you saw?