Truemors
[q url="http://www.caymanobserver.com/viewarticle.cfm?id=1&Section=CoverStories"]UK studies Cayman risk
By Shurna Robbins
The collapse in confidence in the global financial markets was made worse by apparently lax hedge fund regulations in the Cayman Islands and other offshore financial centres, a new British government report has claimed.
The report follows the biggest exercise of identifying the risks to the UK from the Cayman Islands and its other overseas territories in a decade.
While many of its findings will be regarded in Cayman as benign, its assessment of the island's financial industry might make for uneasy reading in George Town.
The Foreign and Commonwealth Office (FCO) report was tabled last week and is being studied by British civil servants and politicians. Some of its findings may lead to policy changes in London that could impact Cayman and the other territories.
It identifies and evaluates numerous risks to the UK from its overseas territories, known as the UK's "contingent liabilities".
....
One of the key risks identified in the report is that worldwide market turbulence from the US subprime mortgage collapse this year was "exacerbated by a lack of transparency over the ownership and scale of risks" within hedge funds. The report acknowledges that most hedge funds are registered in Cayman.
This global financial crisis led to the first run on a retail bank in Britain since the 19th Century and wiped billions of dollars of value from US funds. A number of senior Wall Street bankers have paid for the turbulence with their jobs.
The report addresses the degree to which the overseas territories have met international standards to monitor money laundering and terrorist financing. It says that the <?xml:namespace prefix = st1 />Cayman Islands is the only one of its territories that has ever brought a successful money laundering prosecution. Cayman authorities report five successful prosecutions on financial-crime charges
Comments (0)