Newt Utopia: A graduate level course – required for all regulators and practitioners

Offshore centers have come to play an important role in the institutional structure of international financial markets. The two dimensions of competition underlying offshore financial centers are (1) the competition between the offshore centers and one or more domestic financial markets, and (2) competition amongst the offshore centers. Thus the system of offshore financial centers has created a three-tier structure of international financial markets: (i) domestic, (ii) foreign traditional, and (iii) offshore markets. This is for the financial intermediaries as well as “financial products” markets. Often, the offshore financial markets serve as a catalyst between two domestic financial markets that would, otherwise, be unable to work with one another. An example of this is a US resident forming an IBC to invest in financial instruments not available to US residents.