Goodbye to the British OFC?

Posted on

The Bermuda Royal Gazette (where else could have such a paper?) reports:

Offshore financial centres (OFCs) are facing a "Doomsday scenario" as the world's major economic powers try to put them out of business.

That is the view of consultant Rodney Gallagher, who was a leading adviser to the UK Government on Caribbean financial affairs for more than a decade.

Speaking at the OffshoreAlert Financial Due Diligence annual conference in Miami this week, Mr. Gallagher predicted a particularly bleak future for OFCs that are British Overseas Territories, including Bermuda.

Sitting on a panel discussing the future of OFCs, Mr. Gallagher said such jurisdictions were facing a "perfect storm", due to the severe financial crisis, large countries seeking ways to find badly needed extra revenue after the crash of credit markets and the clampdown on tax havens.

"These three things represent almost a catastrophe for offshore financial centres," Mr. Gallagher told delegates.

He added:

"I am in no doubt that the next five years will see dramatic change and a considerable reduction in the volume of business being done," Mr. Gallagher said.

"Some in the private sector have seen the impact of this already during the first quarter."

I am sure that is true.

It’s the second year in a row that this sort of scenario has been presented at this conference. I was there last year. Things have got worse for them since then. The direction of travel predicted then is happening. I think there is real substance in this.

I’ve long said that for Jersey and Guernsey going bust is the most likely scenario. It’s clear the same is likely in the Turks & Caicos, Bahamas, Bermuda and maybe Cayman. It would happen inn the Isle of Man but for its massive UK government subsidy.

The writing is on the wall. I hope Michael Foot realises.