Why do banks push depositors offshore?
"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?"
Good points. Why is nothing being done about this?