Competition amongst offshore centers is their greatest threat

A US risk consultant based in North Carolina, Brendan Hewson, says that, in his opinion, the more financial industry rules and regulations are implemented by big countries, the better it is for offshore financial centers.

Hewson says that the greatest threat to established offshore centres like the British Virgin Islands, the Cayman Islands, the Bahamas and Bermuda is not the USA but competition among themselves as well as the threat posed by emerging financial centers like Singapore and Dubai. He suggests that, of the newer jurisdictions, Singapore and Dubai are the best-positioned to make changes in the offshore world at the expense of jurisdictions have some reputational problems.

Hewson suggests that the offshore center “with the biggest bulls-eye on its proverbial chest” currently is Bermuda. It is phenomenally financially successful and has peaked economically. However, according to Hewson, it will face a future decline caused by rampant political corruption and the real prospect of independence in the not-too-distant future. “There are striking similarities between what is currently taking place in Bermuda and what took place in the Bahamas in the 1960s and 1970s, when corruption, independence, and a lack of concern for the needs of international businesses contributed to a wave of insurers moving to Bermuda and banks to the Cayman Islands.”

Hewson thinks that the rival offshore centre that stands to benefit from Bermuda’s problems is Cayman that has professional expertise and intellectual capacity to compete with Bermuda, but its legislation is not good enough yet.

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