The Role of offshore Centers in International Financial Intermediation

Abstract

The paper focuses on the role of offshore centers and markets in international finance during the past two decades and the migration of financial activity from the major financial centers to these offshore markets. The paper examines the prospects of offshore centers in view of the convergence of fiscal and regulatory regimes of offshore and domestic financial centers in recent years, the greater involvement of banks in derivative finance at the expense of the traditional offshore interbank markets, and the increased concentration of financial activity in the major financial centers.