Nothing `intrinsically sinister’ about offshore banking – Bahamas PM

Against the backdrop of mounting international pressure on the Caribbean over the perceived role of offshore banking institutions in facilitating financial crimes, including money laundering, Prime Minister of The Bahamas, Perry Christie used this week’s  opening session of the Third Caribbean Conference on the International  Financial Services Sector to defend regional offshore banks, asserting  that they were far more robust than those in countries that continue to fight offshore financial services in the region.

In a direct criticism of pressures being imposed by Europe and North America over assertions that offshore banks are havens for tax dodgers and ill-gotten finances, Christie was openly critical of those who he said  believe that there is “something intrinsically sinister about the accumulation of wealth in offshore jurisdictions.”

Christie told the forum that those who hold that premise seek to “maim and cripple, if not destroy the offshore economies within our region.” And according to Christie the anti-money laundering, anti-terrorism funding and anti-criminal regulatory regimes of many countries in the region “are far more robust and demonstrably far more effective than the corresponding regulatory regimes in many of the same countries that are leading the fight against us”.

Bahamas  Prime Minister  Perry Christie
Bahamas Prime Minister
Perry Christie

In his address the Bahamas Prime Minister asserted that regional offshore financial services can be “responsibly operated and regulated”, adding that the sector represents true tax competition and “in the great majority of cases affords an honest opportunity for families and individuals alike to protect their privacy while accumulating lawfully earned capital for themselves and future generations.”

Moreover, the evidence is overwhelming that most of the investment of this offshore wealth takes place in and generally benefits the developing world.

The Prime Minister noted that the destruction of the offshore financial service economies will inevitably destabilise the countries that depend on them for their livelihood.

The developed world may well end up finding that “To destroy this sector in the Caribbean would effectively cause tens of thousands of newly empowered middle class citizens to slip back into poverty or migrate to the developing world…..that it has only solved one problem by creating an infinitely bigger one for itself,” he added.

Concerning the financial development of the region, Christie said the free trade of international financial services must continue to grow and this can be achieved by adhering to international best practices.

“…the making of a great financial services centre involves the process of ensuring that your services-based economy works well, while also ensuring that your economy supports creativity and innovation.”

Christie went on to challenge the United Nations to take the lead in developing and refining multi-lateral global mechanisms for the governance of the offshore financial services sector that will meet the demands of the developed world for the protection of the fiscal systems.

The 3rd Caribbean Conference on the International Finance Services Sector is jointly hosted by the Caribbean Export Development Agency and the Govern-ment of The Bahamas, with the focus of providing a forum for policy makers, regulators and finance practitioners of Caribbean International Financial Centres to interact with the architects of the major global financial policy initiatives.