Since the onset of the global financial crisis of 2007-08, there has been much debate about the reforms that are needed to make the international financial system more resilient to the onset of financial crises through improvements in what has come to be known as the international financial architecture (IFA).
“Little else is required to carry a state to the highest degree of opulence from the lowest barbarism”, claimed Adam Smith, “than peace, easy taxes and a tolerable administration of justice.”
From a financial perspective, many consider that when money goes offshore, it enters a black hole. Bank secrecy, public corruption and the constant barrage of films and books which put the offshore in a bad light contribute to this image.
International financial centers like the Cayman Islands have experienced over two decades of increased international pressure in the form of new regulation and greater demand for transparency.
This year marked a turning point for international financial centers (IFCs), especially those that are British Overseas Territories (BOTs) and Crown Dependencies (CDs), in terms of the future landscape on which they will compete, cooperate and provide their services.
The world of offshore has long been under attack and with each new wave of regulatory changes the end of small international financial centers is being decried. But so far IFCs have proven extraordinarily resilient.
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