Offshore Banking: An Analysis of Micro- and Macro-Prudential Issues
56 Pages Posted: 10 Feb 2006
Date Written: January 1999
Abstract
The paper takes a closer look at offshore banking - a pervasive practice that has played a role in recent crises. Offshore banking is an increasingly attractive alternative to the sometimes heavily regulated financial markets of emerging economies. From a microeconomic vantage point, offshore banks seem to exploit the risk-return tradeoff by being more profitable than onshore banks, and in many instances also more leveraged. Risks stemming from offshore activities may be easily transmitted onshore with systemic consequences. Current prudential and supervisory frameworks are broadly adequate for risk management if effectively and universally implemented.
Keywords: Offshore Banking, Cross-Border Capital Flows, Banking Problems, Financial Crises, Prudential Regulations, Banking Supervision
JEL Classification: F21, F34, E58, G18, P51
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Caribbean Offshore Financial Centers: Past, Present, and Possibilities for the Future
By Esther C. Suss, Oral H. Williams, ...
-
Concept of Offshore Financial Centers: In Search of an Operational Definition
By Ahmed Zoromé
-
The Role of Offshore Centers in International Financial Intermediation