Luxembourgs prime minister Jean-Claude Juncker (right) starts spilling the beans. AP Photo/Virginia Mayo

Theres a perfect storm brewing against offshore banking, and it seems to be breaking in Europe right now.

The pressure to close deficits in advanced economies and deal with inequality has turned a spotlight on tax evasion. In the US, it led to the Foreign Account Tax Compliance Act(FATCA), which comes into force this year and requires foreign banks to share account information with the Internal Revenue Service.

In the last week, the UK, Germany, Italy, France and Spain have begun an automatic information sharing program modeled on FATCA. On April 10, Luxembourg announced it would begin sharing information about its EU customers accounts with their home countries, and begin negotiating a similar agreement with the United States. (Austria remains the last EU country that wont share tax information.) And,after a scandal where a senior government minister admitted to using an offshore account, French president Franois Hollande will ask a special prosecutor to to pursue cases connected to offshore money.

At least in Luxembourgs case, the straw that broke the camels back may have been last months debt crisis in Cyprus.It became clear that European officials saw the mass of Russian deposits in Cypriot banks, which likely included laundered funds, as an impediment to a rescue. And when a rescue was finally agreed, Cypruss offshore financial business was not spared the consequences. As one of only two European countries with a financial sectorlarger as a share of GDP than Cyprus, Luxembourg came under pressure to change its ways.

So being a tax haven is starting to look rather less attractive as a business model for small European countries. However,while critics of bank secrecy applaud the new agreements to share information, its not much use when accounts are in the name of shell companies.

When someone opens a Swiss bank account, they dont open it in their own name, they open it with a Panama corporation, Delaware, Cayman Islands, Rebecca Wilkins, a senior counsel at the non-profit Center for Tax Justice, says. Under the UBS scandals, of theindividualprosecutions, every single one so far has involved a shell company.

Many of these fronts have recently been revealed by the International Consortium of Investigative Journalists, which obtained records from companies that help customers set up offshore companies disguising their ownership. While legal, this can be exploited by crony capitalists, con men, and tax evaders, leaving government officials in the dark as to who ultimately benefits from a companys assets.

Laws that reveal thebeneficialowners of corporations can be a tough sell for banks trying to sell discretion. After a money laundering crackdown in Lichtenstein, the countrys financial sector shrank 30%.But the US Treasury Department is expected to release new rules in the coming weeks that may force banks to find out who their customers are, and tell the authorities.

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The end of offshore banking in Europe?