The FT has reported this morning that:

HSBC is transferring the bulk of its private banking business in Monaco to CFM Indosuez Wealth Management in a move that completes a significant restructuring of the bank's scandal-plagued division.

HSBC is aiming to transfer the bulk of its current Monaco business, which houses $9bn of customer assets and 200 employees, to Indosuez, and the remainder of the business will be wound down. No financial details of the disposal were revealed.

HSBC has, of course, had a particularly troubled relationship with offshore. And it was, of course, named in the Panama Papers. So maybe this desire to get out of a troubled market should be seen as nothing unusual.

I am, however, not so sure that is true. That is because the buyer is not taking the whole operation. There are parts here that HSBC could not sell. That suggests there was no gain to be had for anyone else from buying them. Bluntly, they are unprofitable.

I do not think this is chance, or an isolated incident. What we know from the Panama Papers is that demand for offshore is falling: Mossack Fonseca reduced the number of companies they managed  by about 25% from 2008 to 2014. And we know that this trend is fairly widespread. Jersey has seen some funds under management almost halve since 2008 whilst the number of banks operating there has fallen dramatically (47 in 2008, 32 now).

The simple, and largely unreported fact is that offshore is becoming unprofitable business. Regulation is obviously a partial explanation for that, but there is something else as well. I suspect that many offshore customers have lost their appetite for risk. And why not? It's obvious that offshore is now a very uncomfortable place to be. In that case it may well be that HSBC is just joining a trend of banks leaving this market.

I am not saying the end of offshore is nigh: I very much doubt that as yet. But we have to be open to the possibility that simply imposing sufficient regulation, fast enough, with the real chance that it is is sufficient to expose tax haven users (and maybe nothing much more is required) will kill this activity because there will be so few reputable organisations wanting to service it that almost no one, bar crooks, will go near it. And that would be a real game changer.