Concept of Offshore Financial Centers: In Search of an Operational Definition

IMF Working Papers, April 1, 2007

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Canonical URL: Concept of Offshore Financial Centers: In Search of an Operational Definition

Author: Ahmed Zoromé
Date: April 1, 2007
Core proposal: a new definition of Offshore Financial Centers (OFCs) and a statistical method to differentiate OFCs from non-OFCs.
Data sources used: Coordinated Portfolio Investment Survey (CPIS), International Investment Position (IIP), and balance of payments.
Key methodological feature: distinguishes OFCs based strictly on macroeconomic features and avoids subjective presumptions on activities or regulatory frameworks.
Method performance: identifies more than 80 percent of the OFCs in the study sample that also appear in the a priori list used by the IMF to conduct its OFC assessment program.
Additional finding: the study identifies three new countries meeting OFC criteria.
Subject keywords: Financial services, International investment position, Nonbank financial institutions, Offshore financial centers, Service exports.
Disclaimer included in source: "This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy."

Statistical method developed to classify jurisdictions as OFCs or non-OFCs.
Empirical inputs:
- Coordinated Portfolio Investment Survey (CPIS)
- International Investment Position (IIP)
- Balance of payments
Classification approach: purely macroeconomic indicators rather than regulatory or activity-based presumptions.

Classification accuracy: identifies more than 80 percent of OFCs in the study sample that also appear in the IMF a priori list used for OFC assessment.
New OFCs detected: three countries meet OFC criteria according to the methodology.
Emphasis on objectivity: methodology distinguishes OFC status based strictly on macroeconomic features.

IMF Working Paper No. 2007/087 — Ahmed Zoromé, "Concept of Offshore Financial Centers: In Search of an Operational Definition", April 1, 2007.

1. OFC Definitions
- 1. OFC Definitions (Markdown version)
- 1. OFC Definitions (PDF)