Offshore banks reform to survive
Offshore bankers are coming under greater scrutiny and pressure to reform. The collapse of Italian dairy products group Parmalat and the EU's decision to target offshore centres and tighten corporate governance have helped to focus the attention of international authorities on this issue.
"The role and regulatory control of offshore centres needs to be tightened," EU internal market commissioner Frits Bolkestein told the European Parliament last month. "Scandal upon scandal will cumulatively weaken financial markets like a corrosive drip of a leaking fuel tank," he added.
Governments have pointed the finger at offshore centres after an investigation into Parmalat revealed that the company had exaggerated the funds that its Cayman Islands unit Bonlat held at Bank of America. The company's total debt is estimated at $17.75 billion. But the days when anyone could stride off a cruise ship into the Caymans or the eastern Caribbean with a suitcase of cash and open a bank account without any personal or corporate tax are clearly over.
Observers say it is now harder to open a bank account in the Cayman capital Georgetown than it is in New York.
"Offshore banking in the Caribbean is going through a number of reforms.