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Craine Stands Up For Offshore IFCs

by Amanda Banks,, London

05 November 2010

The Isle of Man's positive contribution to the City of London and the wider global economy was highlighted on November 2, as the island’s Treasury Minister, Anne Craine, delivered the prestigious Sir Thomas Gresham Docklands Lecture.

Craine used her theme of ‘Extinction or Evolution: The Future for Offshore Centres’ to spell out how small international finance centres (IFCs) can not only survive, but also prosper within a changing economic landscape. She also challenged a number of commonly held myths about the Isle of Man and emphasized its high standards of financial regulation and policy of international co-operation.

The lecture took place at East Wintergarden in London and attracted an audience of more than 300 leading City financiers, regulators, tax experts and decision-makers, as well as representatives from the Isle of Man’s business community.

Introduced by Jack Wigglesworth, a Trustee on the Gresham Council and a former President of the Gresham Society, Craine said that small IFCs had a right to be competitive players in global trade, provided they fully embraced international standards. She also focused on the mutually beneficial relationship between the Isle of Man and the City of London, stating that the island’s successful and diversified economy made a “significant contribution to the liquidity of the UK market.”

“The Crown Dependencies together provided net financing to UK banks of USD332bn in the second quarter of 2009. Investment channelled into small IFCs provides much-needed liquidity, further investment opportunities, and access to capital markets for businesses in both developed and emerging countries,” she told attendees.

The event, the flagship finance lecture in the calendar of Gresham College, provided an opportunity for Craine to dispel some popular myths about offshore centres in general and the Isle of Man in particular. She challenged misconceptions and ‘bleak rhetoric’ surrounding the impact of small IFCs on transparency, regulation and information exchange, and their part in the global economic downturn.

“Over a period of years, and particularly since the global financial crisis, small IFCs have endured political attacks and what I consider to be misguided criticism. Everybody loves to target a convenient scapegoat, especially one whose voice is small and easily drowned out. At the height of the crisis, this unfair and inaccurate targeting diverted attention away from the real causes,” the audience heard.

Craine also underlined the Isle of Man’s leading role in the development and signing of Tax Information Exchange Agreements and the success of its Small Countries Financial Management Programme, aimed at capacity building in small and developing countries. She said that one of the main challenges facing small IFCs was the need to have their views considered by powerful policy-making organizations such as the G20, and suggested that in future they form alliances rather than act in isolation.

“Small IFCs have to work very hard to have our voices heard and our legitimate interests recognized. In the case of the Isle of Man, that involves constructive engagement with the UK government, the development of existing relationships with the EU and OECD, the extension of tax agreement programs and enthusiastic adherence to international regulatory standards. Whether it is listing, upstreaming, asset management, insurance, shipping or even the space industry, everything the Isle of Man does materially and positively supports the larger centres. This is why the Isle of Man is a core asset to the City of London,” Craine concluded.

TAGS: Isle of Man | tax | investment | business | capital markets | insurance | United Kingdom | offshore | G20 | standards | regulation

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