Former chairman of the Cayman Islands Monetary Authority Tim Ridley has called for the creation of a Cabinet ministry dedicated specifically to the financial services industry.
Speaking at a social function organised by the Cayman Islands Bankers’ Association last week at The Ritz-Carlton, Grand Cayman, Mr. Ridley said the financial services industry needed to have a clearly identified and committed political leadership. He said that, plus support for that leadership, were all that were needed for the financial services industry to flourish.
‘This requires a holistic approach spearheaded by an elected Cabinet Minister backed by a specific, focused, well-resourced and correctly branded government department to ensure that the right platform – in all its many facets – is in place; is nurtured and enhanced constantly; and promoted both locally and internationally,’ he said.
Mr. Ridely outlined 15 actions the minister and ministry of finance, along with the private sector, should take to meet the current major challenges in ‘some of the most turbulent times the financial services industry has ever seen’.
First and foremost, Mr. Ridley said government and the private sector needed to interact much more closely in a proactive relationship where both sides respected and listened to each other. He also stressed the need for both government and the private sector to constantly demonstrate the critical importance of the financial services industry to the economic well being of the Cayman Islands.
Mr. Ridley also said that better and earlier engagement with other major jurisdictions and global regulators was needed to secure recognition of Cayman’s regulatory regime and to help shape a non-discriminatory playing field for offshore financial centres.
‘Advance intelligence must be improved and ensure early and proactive engagement – rather than late and reactive responses – on international and onshore developments and initiatives,’ he said. ‘Far better targeted and effective lobbying and media relations are essential, particularly in key centres as Washington, London, Brussels and Paris, to influence political and media perceptions, opinions and outcomes.’
With regard to international cooperation and information exchange, Mr. Ridley said new and better agreements needed to be developed with other jurisdictions for cross-border cooperation in both criminal and civil tax matters. However, he said appropriate safeguards for legitimate privacy and other legal rights also needed to be in place.
Mr. Ridley also suggested joining forces with other quality offshore financial centres – even if they were competitors – to build a cohesive group to engage in international efforts to protect common interests.
Because of increasing tax pressures in onshore jurisdictions, Mr. Ridley said the Cayman Islands should actively encourage wealthy people to buy houses, invest locally and take up physical residence here.
‘Similarly, we should encourage new businesses to establish here with meaningful physical presences and also encourage much greater decision-making and economic activity within the jurisdiction by entities domiciled here,’ he said.
In addition, Mr. Ridley said Cayman should actively develop new government contacts and business sources in the countries of Africa, Asia, Latin American and the Middle East.
‘These countries are less likely to submit to the imperial writs of the UK, UK and the EU, and have little or no enthusiasm for control of international capital remaining in those protectionist hands, or for the impoverishment of small democratic nations,’ he said.
Developing think tanks and quality academic analyses of the benefits of offshore financial centres was something else Mr. Ridley said was needed.
Speaking about the matter afterwards, Mr. Ridley pointed out that such endeavours could be very cost effective.
‘It is actually not that expensive to support/sponsor academic studies that support the case for the symbiotic relationship of onshore and offshore,’ he said. ‘It’s far less expensive than… lobbyists and media campaigns, although I am not saying these are not necessary also.’
Mr. Ridley said there was a growing body of work from respectable academics, including Harvard and Yale, currently analysing available data that shows why the onshore/offshore relationship works for both sides.
‘The problem is how to get it into language that the politicians – and more importantly, their staffers – the media and the layperson can understand,’ he said.