The FAC comprises a 14-member panel of backbench UK Members of Parliament, chaired by Labour MP Mike Gapes. In June, the committee announced an enquiry into the FCO's exercise of its responsibilities and its achievements in relation to the Overseas Territories, and scheduled meetings with heads of these territories for yesterday.

When asked by panel member and Conservative MP Michael Moss why a recent report by the UK National Audit Office found the regulations of the BVI and Cayman Islands financial industries "were superior to others in your general region", Tibbetts responded by explaining that Cayman's financial industry in particular has a culture of compliance supported by legislation.

"We have an environment which accords with international best practice and this encourages business to be done in the Islands because businesses want to conduct their affairs in a jurisdiction which [complies with] such best practices," he told the panel.

Tibbetts explained that the Cayman Islands attracts quality service providers such as lawyers, accountants, auditors, company managers and fund administrators, who complement the strong legislation. "And of course all of those things combined are essential to ensuring that our financial service industry is a successful one. To add to that, we are very stable politically and this is...underpinned by the constitutional relationship which we have with the United Kingdom."

The Cayman leader listed a number of supporting features for the industry that make the Islands attractive: good international air links; an independent regulatory body in the Cayman Islands Monetary Authority; and a strong legal judicial framework, independent of the executive arm of government, which gives confidence to business.

"It means that disputes between parties can be dealt with by a very competent judiciary," Tibbetts explained, adding that: "The Islands also have a very efficient, competent and independent civil service that is able to implement [the executive arm's] policies which are designed to create a business environment in which international financial services can flourish."