EDITORIAL – Financial services: What is our message, who is our messenger?

When asked about the main risks to their organization that they must manage, leaders of large corporations, regardless of the industry, almost always name their single most important asset: their reputation.

Benjamin Franklin observed it takes many good deeds to build a reputation and only one bad one to lose it.

Meanwhile, offshore financial centers appear to be facing an endless string of bad deeds and an image that devolves from shady to dodgy to criminal, depending on the level of media interest.

Positive mentions of offshore financial centers are almost nonexistent. In fact, we are hard pressed to name a single one.

Is it possible the financial services industry in Cayman, and in other offshore financial jurisdictions, has simply given up, perhaps thinking their public relations challenge is insurmountable?

(We except from that observation Cayman’s one-man public relations maelstrom Anthony Travers, who tirelessly, and continuously, defends these islands and the offshore industry, in general. Following the release of the “Panama Papers,” while Cayman was largely silent, Travers’s voice was heard on BBC radio and far-reaching CNBC. He also penned and got published letters to newspaper editors, including the influential Financial Times.)

Two days after the “Panama Papers” story broke internationally, Cayman Finance sent out a statement. Being in the communications business ourselves, we can state with authority that in today’s nearly instant news cycles, two days is an eternity.

A day later, the IFC Forum, a lobbying group for offshore law firms, finally gave birth to a statement, proclaiming not all international financial centers are the same, and the ones in the British territories are better and more transparent than the rest. Ho-hum.

In sum, our message has been: We are not Panama. We are not secretive. We are not a tax haven. And, most puzzling to outside observers, we are not offshore.

The latest fashion, among the government and financial services crowd, of “renaming” offshore financial centers “small international financial centers” is a nonstarter. It is playing, and not very successfully, with euphemisms. We must ask ourselves this question: Are we ashamed or embarrassed about the very industry – offshore finance – that contributes more than half of the revenue to the Cayman Islands treasury?

Why are the stories not being told of offshore centers facilitating international trade, reducing complexity in international mergers and acquisitions, channeling cross-border investments, holding cash for large corporations as safe havens, helping companies in the developing world access the capital markets, eliminating double taxation for fund investors, enabling financial structures fit for a globalized economy and ensuring that corporations remain competitive and as a result secure jobs onshore?

If the offshore industry cannot confidently articulate why it is important in the global economy and ultimately to onshore economies, others, such as the Tax Justice Network, Global Witness or Oxfam, will happily fill the void with sometimes hair-raising “research” and tell the world why offshore is corrupt and criminal, if not downright immoral.

The reality is that Cayman is, and historically has been, amateurishly inept in telling its own story. Politicians, public relations “professionals,” and industry practitioners routinely issue such sanitized, anodyne “statements” that, to any serious editor, they are virtually worthless.

Instead of protecting their reputation by establishing proper media relations, the government and financial services firms in the offshore space have ceded the media coverage almost entirely to hostile activist groups.

Let us close with this question: Is there anyone on this island in government, in public relations, or in the financial services industry who can even name, or is on a first-name basis with, the editor of the Wall Street Journal, The Economist, or the financial editor of The New York Times or The Washington Post?

We did not think so.

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2 COMMENTS

  1. Another great editorial and laser targeted focus on the beating pulse of the nation. We need new leadership at Cayman Finance (CF)- our supposed PR body in the most important industry in Cayman which accounts for 60 percent of our GDP. The Chamber of Commerce (COC) is also worthy of criticism and the ministries of finance (boy love reading those audited reports going back 12 to 15 years- so good it’s burning my eyes – LOL). Great job!

    Too many folks in government (and speaking to some ministers whose terms are up before you can say “cat in a hat”) / bodies like the COC and the drinking club, oops sorry meant CF they all love cushy high paying jobs in Cayman and boy do they love to hire consultants. Allot of our so called leaders simply lack vision, common sense, and the tenacity to lead- to name a few. Today’s little fight may be won but don’t you dare declare victory just yet. The global elite will decide when the central registry MUST be installed and that’s all to it. It’s all a matter of time and sad to see my sons, daughters, and other kin folk right here in Cayman who have all excelled in their fields under the GIANT umbrella of financial services (a declining industry ) will be forced to learn a new trade.

    How about farming? We all would be healthier vs. digesting food riddled with preservatives, pesticides, hormones and other wonderful killers which come in on the flights each day to grace our dinner tables. Yepp 3 cheers for turning out more farmers in Cayman. At least you will contribute to producing something tangible that you can hold, smell, kiss and eat and chances are wont give you cancer or some other ailment. Tangible food I say compared to managing, setting up or working with a financial derivative stuffed in any of our banks’ or mutual funds’ books whose value is hard to predict or estimate and can be snatched away in a PICOSECOND by some high frequency trader on High Street or Wall Street.

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  2. The Editor said:

    “…Why are the stories not being told of offshore centers facilitating international trade, reducing complexity in international mergers and acquisitions, channeling cross-border investments, holding cash for large corporations as safe havens, helping companies in the developing world access the capital markets, eliminating double taxation for fund investors, enabling financial structures fit for a globalized economy and ensuring that corporations remain competitive and as a result secure jobs onshore?..”

    A good journalist doesn’t wait for the story to come to him or her.

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