OGBS holds meeting in Cayman

The Offshore Group of Banking Supervisors held its 25th annual meeting on Grand Cayman last week.

Key issues discussed at the two-day meeting included combating financial crime; international co-operation; international standards compliance; and embracing financial regulation.

Attending the meeting were delegates from the OGBS’s 16-member countries, countries with observer status, and participating international financial organisations including the International Monetary Fund and the Financial Action Task Force on Money Laundering.

Speakers for Thursday’s opening session included the Governor Bruce Dinwiddy, Financial Secretary Kenneth Jefferson and OGBS chairman Colin Powell, who said this annual meeting was special.

‘I’d like to think we have achieved a good deal in the 25 years, and I am confident that our deliberations over the next two days will help us add to our achievements,’ he said.

Mr. Powell explained that the OGBS was formed because of concerns that banks in the most industrialised countries were booking large international loans through subsidiaries in offshore centres, which were not considered to be subject to a sufficient standard of banking supervision.

‘Traditionally, the attitude of the G7 countries has tended to be that offshore financial centres need to be threatened and cajoled into complying with international standards,’ he said.

The OBGS has worked to change that perception, and to set the standards for others to follow.

‘The Offshore Group has sought with some success to change the emphasis from offshore/onshore to one of cooperative/non-cooperative or compliant/non-compliant, but the G7 countries, through the Financial Stability Forum, have continued to identify offshore as a specific are of concern.’

Mr. Powell pointed out the International Monetary Fund’s regular progress reports do not bear out those concerns.

‘The latest progress report issued at the end of February 2005 noted that compliance of standards in offshore financial centres is, on average, better than in other jurisdictions assessed under the IMF’s {assessment} programme.’

Cayman Islands Financial Secretary Kenneth Jefferson noted the meeting brought together representatives from regulatory bodies and offshore financial centres alike.

‘I would commend such engagement as an appropriate response to the need for fairness, transparency and non-discrimination,’ he said. ‘These are all essential features of a level playing field.’

Mr. Jefferson said he was confident that the OGBS shared the Cayman Islands view accepting a fundamental obligation to adhere to accepted international financial services standards, both as they are now and in the future as they evolve.

‘The Cayman Islands experience has been that it is not the absence of regulation that has promoted business, but rather… the existence of sensible regulation.’

Mr. Jefferson said it was important the international financial services community work together.

‘The special role of effective international cooperation in the context of the provision of cross-border financial services is unquestionable,’ he said.

‘This is particularly the case since it is generally acknowledged that even the most robust regulatory system cannot prevent financial fraud.

‘Therefore, what everyone does when fraud or other crime is discovered is absolutely critical.’

Governor Dinwiddy encouraged the continued collaboration of the participants to further the integrity of offshore financial centres.

‘We share a common interest in upholding and strengthening our collective reputation, and in working to rebut the prejudices that exist against us,’ he said.