FINANCIAL IMPERIALISM: International challenges to the offshore financial services industry

We are in probably the most turbulent times the offshore financial industry has ever seen. Almost daily, new events come to light and new initiatives are unveiled. The pen is no sooner dry, than the commentary is out of date, so I apologise if that is the case here. I hope not, as I have tried to look over the horizon. 

Converging economic crime

At age 19 there was no doubt in my mind that I did not want a career in criminal law. I chose the much more objective (and enjoyable) commercial law. So much for that!   

 

Long attention span needed

A popular TV show in the early nineties was “Short Attention Span Theater”. The title itself neatly parodied the growing culture of clips and sound bites to convey both news and entertainment and, sadly, this trend has continued. One result is that today many people obtain nearly all their financial information from television and internet sources, which deal with complex economic issues in a thirty second burst or a couple of pithy headlines.

A future of wealth confiscation?

Warren Buffett famously explained to his shareholders in 2004 that investors “should try to be fearful when others are greedy and greedy when others are fearful". 

 

There is good news

The last couple of years have left people in a depressed mood. But if one looks at the world as a glass half full rather than half empty, there is reason for optimism. The fact is the world economy is growing and in some important places, China, India, Brazil, Egypt, Turkey, Indonesia, Chile, etc, at very substantial rates.

The growing threat of wealth taxation

We need a tax system which asks the billionaire class to pay its fair share of taxes and which reduces the obscene degree of wealth inequality in America.

 

Entering a year of uncertainty and opportunity

The year 2009 delivered a surprisingly strong recovery as equity markets rebounded from the historic financial crisis seen in the second half 2008. The remarkable levels of government investment into the global financial system seem to have rescued the world’s economy from a potential disaster that could have taken decades to recover from.  

The best defence is a good offence

Both the US Congress and most of Europe took vacations at the end of the summer, bringing a temporary respite in most of the efforts by the American government, EU, OECD and many European governments; although American efforts to breach Swiss banking secrecy continued despite the August heat. Nonetheless, when congressmen and senators stagger back this fall from their mauling at the hands of constituents angry over soaring deficits and the proposed health care ‘reforms’, the proposed Stop Tax Haven Abuse Act, anti-offshore budget provisions...

Circumventing government

Cayman has taken just such a permissive approach to certain forms of financial regulation and has reaped the benefits. Extending that approach into other areas might well enable the island to become a hub for other entrepreneurial activities, to the benefit of islanders and to the world.

 

The future of the Cayman financial industry

If the Cayman financial industry were faced with extinction or only the potential of a diminished role, we would not bother providing you with the third edition of the Cayman Financial Review, which you are now reading. Cayman can continue to grow as a financial centre, provided both the new government and the financial industry do more to protect it from the financial imperialism of foreign governments, and provided the private sector – with the support of government – develops new products and continues to improve existing financial services.

International regulatory policy: Risking a disconnect

Just as natural science developed out of a natural philosophy we are hopefully moving toward a science of regulation, both in the sense of being well-established knowledge and drawing on political science and quantitative economics.  

 

Simplicity is the ultimate sophistication

Crystal ball gazing is precarious at the best of times, but especially so in the current world economic environment. This does not stop people predicting the timing of the global economic recovery.

Whither the Cayman Dollar?

The Swiss franc, the currency of a country that has a few things in common with the Cayman Islands, shot up from $1.082 (USD/CHF) on 5 April of this year to $1.375 on 10 August, an increase of 27 per cent in four months.

Three lessons for financial regulators from 1970s price control

In the early 1970s, there was no euro, Greece could print as many drachmas as it wanted, and the notion of a common European fiscal policy would have been dismissed as sheer fantasy by all but the most ardent proponents of a “United States of Europe”.

 

A new paradigm for economic sustainability

 Governments the world over are faced with the challenge of a growing imbalance between public spending and revenues.   

Changing direction on bank regulation

The quality and cost of payment services from M-Pesa in Kenya to Apple Pay in the U.S. are steadily improving. However, the channeling of saving to investors is lagging behind.   

 

The re-launch of the Cayman Financial Review

This is an exciting moment as we continue to build on the foundations and excellent work laid down by the previous publisher, Paul Byles....

How offshore financial centres will save countries

The great curse of democracies is that eventually a majority of the people become addicted to and demand ever more government benefits that cannot be funded by the diminishing numbers of taxpayers or through borrowing.

 

Natural resources and finance

Unfortunately, many jurisdictions rich in natural resource deposits are poor in rule of law.   

 

Capital Mobility

An explosion of prosperity around the world has followed the increasing liberalisation (globalisation) of trade and investment.

 

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