An independent report published in early June 2012 provides
further evidence of the Isle of Man's positive contribution to
the global economy.
The Economic Research Report, produced by Ernst & Young LLP,
describes the Island as a key commercial partner that delivers many
benefits to the international community, to the UK, and City of
London in particular. The report finds compelling evidence of this
contribution by showing that the Island provided $38.9 billion in
net financing to the UK in the second quarter of 2011, according to
Bank of England statistics.
The Island's progression into a diversified and thriving
International Business Centre (IBC) is highlighted, along with its
position at the forefront of regulatory standards. The report also
counters critics who claim that IBCs cause distortions in the
global economic and financial system, saying a large body of
independent research has 'strongly proved the opposite is in
fact true.' It adds: 'IBCs play a key role in contributing
to investment, employment and growth in neighbouring countries in
particular, and the global economy in general.'
The Ernst & Young report is based on a robust and independent
analysis of the facts and data, and the results of a series of
interviews with key stakeholders. The findings provide solid
evidence that the Isle of Man is a responsible and transparent
country that benefits the UK and emerging world markets.
Chief Minister Allan Bell MHK said:
'This report provides an objective view of the Isle of
Man's economic strengths and the significant contribution we
make to the global economy. It also emphasises the Island's
vital role, particularly since the credit crunch of 2008, as a
provider of financial flows to UK and international markets in
three main areas: liquidity, listed companies and investment. One
of the overriding conclusions from the report is that the UK and
Isle of Man benefit from each other's success, and it is in the
best interests of the UK to see the Island do well. This is a
message we will continue to deliver to UK Government Ministers, MPs
and business leaders in Westminster and the City of
The report charts the Isle of Man's 'remarkable'
transformation, from an economy based on agriculture, tourism and
fishing, with unemployment exceeding 10%, into a dynamic IBC with
per capita income higher than the EU average. It says the main
driver behind 28 years of unbroken growth has been the Government
strategy to support the diversification of the economy into high
value added sectors such as advanced engineering and Information
and Communications Technology (ICT).
The broadening of the Island's business base, combined with
the development of an intelligent regulatory framework aligned to
international standards, has also helped to mitigate the impact of
the international financial crisis. The report identifies the
resilience of the Isle of Man economy as providing significant
benefits to the City and UK during a period of unprecedented
'The Isle of Man has outperformed many IBCs in the provision
of liquidity over the past years and in particular during the
financial crisis when liquidity was most needed in the UK financial
markets. The Isle of Man's role in supporting the UK
economy's growth and its financial sector is often
underestimated. A reduction of this role is very likely to lead to
unintended negative consequences, which might be overlooked by
policy decisions,' according to the report.
The Miami-based Offshore Alert Conference has become a regular draw for representatives of Cayman’s financial services industry in recent years, and this year’s event is no exception with the Cayman Islands lending strong support through the provision of speakers from both the financial services industry and Government’s Ministry for Financial Services.
The Organisation for Economic Co-operation and Development recently published a report in which the Cayman Islands was commended for the "streamlined, efficient and responsive procedures it has is in place to facilitate the exchange of information for tax purposes".
On 1st April the new UK "Twin Peaks" regulatory regime was launched. The much criticised FSA was replaced with the Financial Conduct Authority ("FCA") and the Prudential Regulatory Authority ("PRA"). Martin Wheatley, the FCA’s chief executive has publicly criticised the approach of the former FSA as "robotic" and a more challenging UK regulatory climate is widely anticipated.
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