In the last 35 years the Cayman Islands have become a key jurisdiction in the global financial system with many core functions centred on the Caribbean islands. However, since the credit crunch and the global financial crisis there has been a major and ongoing push to peel back the layers of secrecy that made the Cayman Islands such an important destination to begin with.
Many offshore centres such as the Channel Islands, Isle of Man and Malta have in the past few years established wide ranging reforms designed to make the territories more transparent to international investors and global financial regulatory authorities.
In order to compete with these long standing rivals the Cayman Islands is coming under increasing pressure to improve its regulatory rigour and reporting conventions.
There has been significant resistance to change from traditional Cayman power bases due to a natural fear of foreign influence especially from former colonial power the United Kingdom.
Tim Ridley, chairman of Cayman Island Directors Association until 2008 told the Financial Times that if the Cayman Islands did not reform then they risked damaging the entire financial services industry on which the Islands depend.
He said, “Going back to growing thatch palm and catching turtles is no way to make a living,
“There are residual areas of Luddite behaviour which do not serve the industry well,
“Cayman has been wrestling with the issue of transparency for years. There has been and will be much discussion, but what matters is that the Cayman Island Directors Association is sensibly making haste slowly. There are lobbying groups both on and off the islands, and Cima needs to reach a balanced decision.”