Offshore Banking
CHAPTER 1 1.0 INTRODUCTION 1.1 BACKGROUND OF THE STUDY
The word offshore is used to describe business carried out between foreigners in foreign-denominated currency and operates from a tax haven (Hammett, 2001:203). This basically implies that an offshore bank has to be foreign or at least foreign in nature or operation. This means that, like the several offshore banks in Switzerland, they do not necessary have to be in a foreign land (or an island) but necessary has to act as if (Ganson, 2007). This may include the operations of the local offshore bank in foreign currency; being free from local banks’ constrictions - Less restrictive legal regulation-; being a tax haven for investors; total bank secrecy -or bank private- (which is a legal principle under which banks are allowed to protect personal information about their customers, through the use of numbered bank accounts or otherwise), just to mention a few.
This is quite a refreshing piece of banking. As people who are being pursued just for political reasons can get a breather with a place to bank in total secrecy without being subjected to persecutions [as was in the case of the Nazi regime against bank accounts of Jews and other “enemies of the German state” held in Switzerland (McCreery, 2007)]. Because of greater privacy with offshore banking, people with special needs that are outside the general retail banking’s scope are catered for through private banking (Casu et al, 2006) that are offered by offshore banks, the offshore banks on the other hand has a capacity to attract large foreign deposits which are non-inflationary by in practice as they could be sterilized (Lipsey and Chrystal, 2005) and can be accessed by locals to expand the economy of the bank’s home country as it happens elsewhere (e.g. Cayman Islands, San Marino and Switzerland). This makes it indeed refreshing.
In view of this, Ghana in the wake of pursuing its long cherished dream, quietly took its first major steps
The word offshore is used to describe business carried out between foreigners in foreign-denominated currency and operates from a tax haven (Hammett, 2001:203). This basically implies that an offshore bank has to be foreign or at least foreign in nature or operation. This means that, like the several offshore banks in Switzerland, they do not necessary have to be in a foreign land (or an island) but necessary has to act as if (Ganson, 2007). This may include the operations of the local offshore bank in foreign currency; being free from local banks’ constrictions - Less restrictive legal regulation-; being a tax haven for investors; total bank secrecy -or bank private- (which is a legal principle under which banks are allowed to protect personal information about their customers, through the use of numbered bank accounts or otherwise), just to mention a few.
This is quite a refreshing piece of banking. As people who are being pursued just for political reasons can get a breather with a place to bank in total secrecy without being subjected to persecutions [as was in the case of the Nazi regime against bank accounts of Jews and other “enemies of the German state” held in Switzerland (McCreery, 2007)]. Because of greater privacy with offshore banking, people with special needs that are outside the general retail banking’s scope are catered for through private banking (Casu et al, 2006) that are offered by offshore banks, the offshore banks on the other hand has a capacity to attract large foreign deposits which are non-inflationary by in practice as they could be sterilized (Lipsey and Chrystal, 2005) and can be accessed by locals to expand the economy of the bank’s home country as it happens elsewhere (e.g. Cayman Islands, San Marino and Switzerland). This makes it indeed refreshing.
In view of this, Ghana in the wake of pursuing its long cherished dream, quietly took its first major steps
References: Ablordeppey D. S., 2009. “Making Ghana financial services hub… we need conductive environment.” Daily Graphic, Tuesday, February 3, 2009 pg 29. Graphic Communications Group Ltd., Accra. Amediku S., 2006. “Development of Offshore Financial Services Centre in Ghana: Issues and Implications”. Working Paper © 2006 Bank of Ghana WP/BOG-2006/01. Bank of Ghana consultation paper, October 2007 Bank of Ghana press release, 2008. “Bank of Ghana raises minimum capital requirements for banks”. February 14, 2008. Casu B., Girardone C., and Molyneux P., 2006. “Introduction to Banking”. Pearson Education Limited, Edinburgh Gate, Harlow, Essex CM20 2JE, England. Chrystal G Cooper, N. R., 1971. “Towards an International Capital Market”, in C. P. Kindlebenger and A Shonfield (Eds.). North American and Western European Economic Policies, Macmillan, 1971, pp. 192-208. Czinkota, R. M., Ronkainen A. I., and Moffet H. M., 2000. “International business Update 2000.” The Dryden Press, Harcourt College Publishers, 6277 Sea Harbor Drive, Orlando, Florida 32887-6777. Daily Graphic, 2009. “Extend tenure of future Presidents”. Tuesday January 6th, 2009. Graphic Communication Group Ltd., Graphic Road Accra. Financial Stability Report, January, 2006. VOLUME 6 NO. 1/2006. Statistical release. Ganson S., 2007 Ghana News Agency, Sat Sept 08 2007. Hammett M., 2001 Houlder V. and Peel M., 2008. “Harbours of resentment”. Financial Times December 1, 2008, p.11 King R King R. G. and Levine, R., 1993a. “Finance and Growth. Schumpeter Might Be Right”, Quarterly Journal of Economics, vol. 108, pp. 717-738. Kwablah E., 2008 Levine R., 1997. ‘‘Financial Development and Economic Growth: Views and Agenda,’’ Journal of Economic Literature, vol. 35, pp. 688-726 Levine R., Loayza N McCreery C., 2007. http://www.thestatesmanonline.com/pages/newsS Nissanke M Pearce F. I. and Rowan C. D. “A framework for Research into Real Effects of International Capital Movements.” In T Bangiotti (ed.), Essays in honor of Marco Fanno, Cedam, Podora, 1966, pp. 505-35. Research department bank of Ghana, October 2008 Reuters, 2009. “G 20 strikes one trillion dollar deal”. Daily Graphic, Saturday, April 4, 2009. Graphic Communication Group Ltd., Graphic Road Accra. Robson C., 2002. “Real World Research (2nd edn), Oxford, Blackwell. Saunders M., Lewis P Spectator, 2007. Feature: “Barclays at 90 – First in offshore banking”. Page number 22, at September 15, 2007. ISSN: 0855 – 1500. The Banking Act, 2004 (Act 673). Wikipedia, 2008. http://en.wikipedia.org/wiki/Offshore_bank, on 7/12/2008, 14:36 APPENDIX 1