This is a report from the ad hoc working group established in April 1999 under the Chair of Mr John Palmer, Superintendant of Financial Institutions in Canada, to:

  • consider the implications of offshore financial centres (OFCs) for global financial stability;
  • evaluate the adherence of OFCs with internationally accepted standards and good practices; and
  • make recommendations on the above, including the observance of standards by problematic OFCs.

The report made 11 recommendations concerning prudential and market integrity issues and committed to reporting back on progress in the fall of 2001.

In September 2001, the FSF reviewed progress, urged OFCs to improve their supervisory and cooperation practices, and stressed the importance of participating in and disclosing the results of assessment programs (such as those run by the IMF).

The FSF urged its members to increase technical assistance to OFCs to implement standards and welcomed the proposal of the Basel Committee on Banking Supervision to set up a contact group with OFC supervisors.