Sunday, November 08, 2009

One woman's experience with the Isle of Man

It can be easy to forget that secrecy jurisdictions, at the end of the day, affect the lives of ordinary people. This short video is worth watching: it is the kind of thing that has happened to so many people. "Because we were expats and living abroad, we had to move our savings offshore - to the Isle of Man."

Although this is not quite true - expatriates can bank onshore - they are generally only given access to onshore accounts with interest rates that are very significantly lower than what is available offshore. Banks, it seems, push expats offshore.


Anonymous Anonymous said...

I do enjoy your analyses, which are frequently insightful and well-considered. However, it's not just the interest rates themselves that drew (or pushed) UK expats into offshore banks - the availability of onshore sterling accounts for UK citizens living abroad was extremely limited, something the Treasury Select Committee on the Icelandic banks' collapse itself accepted - my own experience was that availability was effectively zero, and that only changed as a result of the collapse.

Nearly everyone has accepted that this was in fact the case - the British Banking Association (BBA) even put a tool on its website to assist expats in finding banks that didn't have the (unnecessary) requirement to prove a UK address as part of the KYC anti-money-laundering checks. UK anti-money-laundering legislation does not require this, so why were UK banks unilaterally - under the guise of over-zealous "regulatory compliance" - pushing depositor expats into their offshore vehicles?

Could it be that their business model found this offshore source of "cheap money" (cheap from both a regulatory and a commercial perspective) attractive? The money sourced generally ended up in the bank's head office, so why did the FSA collude in this occurring by allowing these circumstances to arise?

6:00 am  

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