Jersey Finance has welcomed the conclusions of the Review of British Offshore Financial Centres, which was launched in November last year when Michael Foot was asked to review the opportunities and challenges facing British Crown Dependencies and overseas territories that had significant financial centres.
Published today, the report includes an examination of how these financial centres are managing the effects of the economic downturn, as well as their overall ability to respond to major economic shocks. Issues such as implementation of international standards for regulation and information exchange are also reviewed.
Jersey is regarded as performing extremely well in all areas covered by the review. It specifically highlighted the value that Jersey had provided to the UK throughout the banking crisis as the largest provider of net deposits – in the region of USD218.3bn in the second quarter of 2009 alone.
The report says the Crown Dependencies “make significant contribution to the liquidity of the UK market” and that the “decision to build up reserves in recent years during a period of rapid economic growth has served to increase…resilience”.
The report also concludes that the amount of UK tax avoided by UK corporates using British offshore financial centres was “significantly lower than estimates produced by previous studies have suggested”. The Crown Dependencies generate significant professional fees for UK professionals and are an important contributor to London as a global financial centre.
A number of recommendations have been made, including calls for the UK to lead the way in global efforts towards achieving a level playing field by calling on all EU member states and third countries to move to automatic exchange of information under the EU Savings Tax Directive.
Geoff Cook (pictured), chief executive of Jersey Finance, says: “This latest review has demonstrated once again that Jersey’s financial services industry has good resilience in the face of a severe economic downturn, and that it has a regulatory regime of a high international standard, capable of evolving to meet changing global requirements. The positive findings of the British Offshore Financial Centres Review are a further endorsement in a year during which Jersey has been placed on the ‘white list’ by the OECD for meeting agreed international tax standards and been classed by the IMF in the ‘top division’ of international finance centres, for the quality of its regulatory and supervisory regime.
“We wholeheartedly support any efforts to strengthen the regulatory and supervisory oversight of the global financial services industry in the wake of the unprecedented financial crisis, and Jersey’s financial services industry will continue to co-operate in any independent reviews and assessments that help to demonstrate our stability and effectiveness. Jersey has ably shown, time and time again, that its finance industry applies the highest standards of corporate governance, transparency and sound regulation.”