G7 forum warning for offshore havens
Offshore financial centres were warned yesterday by global financial watchdogs to step-up supervision measures and co-operate with international regulators.
The Group of Seven Financial Stability Forum called on offshore centres to renew their efforts to fulfil international standards for supervision, co-operation and information sharing, or risk posing a threat to global financial stability.
A FSF spokesman said: ‘Such OFCs constitute weak links in an increasingly integrated international financial system and hinder broader efforts to raise standards of soundness and transparency in the global system.’
UK overseas territories and British Isle’s tax havens are among 42 offshore centres rated in three groups grading the threat they pose to the international finance system.
Hong Kong, Luxembourg, Singapore and Switzerland were ranked in the top group; with Guernsey, Jersey and the Isle of Man, as well as Dublin also given top ranking but in need of ‘continuing efforts’ to fulfil standards.
Andorra, Bahrain, Barbados, Bermuda, Gibraltar, Malta and Monaco were among the second group of nine deemed in some need of stepping-up standards. Four UK overseas territories – Anguilla, the British Virgin Islands, Cayman Islands and the Turks and Caicos – were listed among 25 OFCS most in need of a regulatory assessment and shake-up.
Other OFCs posing a risk to financial stability include Belize, Costa Rica, Panama, Cyprus, Lebanon and Liechtenstein.
The forum has called for OFCs to complete assisted self-assessments, address shortfalls through action plans and agree to external assessment.
‘Public disclosure of assessment findings would provide an avenue through which progress towards adherence to international standards could be demonstrated by OFC,’ the FSF stated.
Top financiers, politicians and bankers from the leading industrialised nations also called on world financial centres such as London to provide resources and expertise to improve OFC supervisory systems.
Economic secretary Melanie Johnson said: ‘It is clear that some jurisdictions are making greater efforts than others to meet the highest standards.’
She said that the UK overseas territories had made a political commitment tosatisfy the international standards.
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She claimed: ‘Implementation of any recommendations should see the Overseas Territories move to the top division.’
Big five firm KPMG are due next month to report a review for government of financial services sector in the UK Overseas Territories.
UK tax havens praised by government for their response to tighter regulations