Aliya Allen, chief executive officer and executive director, Bahamas Financial Services Board (BFSB), was part of a panel discussion at the Financial Times 2012 Global Summit on International Financial Centres, held in London November 27-28.

The comprehensive two-day summit was sponsored under the broad theme: Delivering Competitiveness and Growth in the Changing Global Economy.

Allen responded to questions posed to her on the topic: Offshore Financial Centres (IFCs) – Are they good for the global economy?

“I think it’s important to recognize that regulation and transparency standards in small IFCs are comparable and, in some cases, more robust than large financial centres,” said Allen when asked to compare the regulatory and transparency standards of small and large IFCs.

“Several recently released reports support this statement. For example, a report by Jason Sharman unequivocally disabuses the view that small IFCs are loosely regulated. Research confirmed that it is easier to incorporate an untraceable shell in the US than any other country, save for Kenya. Many small IFCs are full members of international regulatory bodies and have rigorous KYC and AML standards.”

Allen said that The Bahamas has been working hard to refine the legal infrastructure and making the case for its “rightful and legitimate position in the international financial community by becoming critically important players on the global scale.”

Allen also said that small IFCs are significant contributors to the major economies and rising powers that surround them.

She went on to point out that the Hines Report in 2010 noted a number of positive factors impacting growth, specifically that small IFCs facilitate liquidity and investment into established markets and provide a safe haven for capital and assets from political instability and nationalization.

“Small IFCs facilitate capital flows because of our clear tax rules, our investor friendly legal systems and our well regulated though less cumbersome banking infrastructure,” added Allen quoting the report. “We prevent double taxation and maximisation of returns for funds.”

“The facilitation of investment flows also was singled out by The Sharman report referenced above, which said ‘the primary conduit for foreign flows of investment both inbound and outbound have been IFCs’,” she added.