International Monetary Fund. External Relations Dept.
Offshore financial centers, which nowadays account for a significant portion of global financial flows, typically do better than many countries in complying with international standards and codes of good practice, and in cooperating and sharing information among regulatory bodies, reflecting the on-average higher incomes of these centers. A staff report on the initial assessment phase of the IMF program noted that 41 of 44 contacted jurisdictions had been appraised, and these centers have published their reports.
This paper updates Executive Directors on the progress since February 2005 in implementing the second phase of the offshore financial center (OFC) program as agreed in November 2003 (see PIN No. 03/138 at http://www.imf.org). At that time, Directors recognized that OFCs could pose prudential and financial integrity risks to the international financial system. In this context, Directors agreed that the monitoring of OFCs' activities and their compliance with supervisory and integrity standards should become a standard component of the financial sector work of the Fund. They also requested periodic updates on the progress with implementation of the program. Earlier updates were provided in March 2004 (Offshore Financial Centers—The Assessment Program—An Update) and February 2005 (Offshore Financial Centers—The Assessment Program—A Progress Report). With the completion of the first round of assessments, staff have begun implementing the second phase of the program.