This page contains a link which allows you to download the Financial Stability Forum Report, as well as the Cayman Islands Government's response to the FSF Report.

The documents consists of 71 pages, and is in PDF format which requires Adobe Acrobat Reader in order to view it. You may download Adobe Acrobat Reader by going to the Adobe Web site.

 

The FSF Report - 345KB

Below is the Cayman Islands Government's response to the FSF Report, released on 29 May, 2000, by GIS (Government Information Services).

The Cayman Islands' financial sector is well regulated, with continual improvements to its regulatory framework, and government is confident that the results of proper assessments, which have been and are being done, will bear this out.

This is the word from the Financial Secretary the Hon. George McCarthy in response to the recent press release of the G7's Financial Stability Forum (FSF) groupings of Offshore Financial Centres into different categories. He noted that the categorisations were not meant to be taken as an assessment itself, but as a guide to setting priorities for assessment.

The FSF release grouped offshore financial centres (OFCs) into three categories based on their perceived quality of supervision and cooperation, with category one having the highest quality relative to the size of its OFCs' activity. It listed Cayman in category three -- among those centres generally perceived as having a lower quality in terms of their legal infrastructure, supervisory practices, and/or resources devoted to supervision and co-operation than those in categories one and two.

Mr. McCarthy disagreed with the categorisation of the Cayman Islands and pointed out that the FSF itself had acknowledged that its categories were based on the perceptions rather than empirical data. It had also stated that the report should not be viewed as an assessment: "The Financial Stabiltiy Forum, in its own words, stressed that the 'categorisation of OFCs into these three groupings is based on responses of OFC supervisors and the impressions of a wide range of onshore supervisors at a particular point in time. The categorisation does not constitute judgement about any jurisdiction's adherence to international standards.' Unfortunately, the categorisation puts Cayman is a bad light without proper evidence." Mr. McCarthy continued: "The Financial Stability Forum's Report of the Working Group on Offshore Centres which was released in April 2000 recommended that the International Monetary Fund undertake an assessment of OFCs' adherence to these standards. That assessment has not yet started."

"The Cayman Islands has been undergoing several other external assessments," the Financial Secretary added. "For example, we have been working with the OECD, which is expected to release its report on tax havens in late June. In addition, we are now involved in an assessment by KPMG. This was commissioned jointly by the Caribbean Overseas Territories and Britain to assess the ongoing enhancement of our financial regulation. The results of that study are expected in July. Anguilla, Bermuda, the BVI, Montserrat and the Turks and Caicos Islands are also part of that exercise."

"I am confident that the high standards of regulation and our commitment to maintaining and enhancing that regulation will be recognised, as it has been in the past by bodies such as the Caribbean Financial Action Task Force," Mr. McCarthy concluded.