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Regulatory Effectiveness in Onshore & Offshore Financial Centers

44 Pages Posted: 6 Mar 2012 Last revised: 6 Aug 2012

Andrew P. Morriss

Texas A&M School of Law; PERC - Property and Environment Research Center; George Mason University - Mercatus Center

Clifford Chad Henson

Texas A&M School of Law; Property & Environment Research Center

Date Written: March 3, 2012

Abstract

Onshore jurisdictions, such as the United States, United Kingdom, France and Germany, are critical of offshore financial centers (OFCs), such as Bermuda, the Cayman Islands, and the Channel Islands. Arguments against OFCs include claims that their regulatory oversight is lax, allowing fraud and criminal activity. In this article, we present cross-jurisdictional data, showing that OFCs are not lax. We also provide qualitative analyses of regulatory effectiveness, demonstrating that input-based measures of regulation are inappropriate metrics for comparing jurisdictions. Based on both quantitative input measures and a qualitative assessment, we reject the onshore critique of OFCs as bastions of laxity.

Keywords: offshore financial centers, OFCs, tax competition, financial regulation

Suggested Citation

Morriss, Andrew P. and Henson, Clifford Chad, Regulatory Effectiveness in Onshore & Offshore Financial Centers (March 3, 2012). Available at SSRN: https://ssrn.com/abstract=2016310 or http://dx.doi.org/10.2139/ssrn.2016310

Andrew P. Morriss (Contact Author)

Texas A&M School of Law ( email )

1515 Commerce Street
Fort Worth, TX 76133
United States

PERC - Property and Environment Research Center ( email )

2048 Analysis Drive
Suite A
Bozeman, MT 59718
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George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

Clifford Chad Henson

Texas A&M School of Law

1515 Commerce St.
Fort Worth, TX 76102
United States

Property & Environment Research Center ( email )

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

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