Professional Services: A flight to quality

Thirty years ago, the Cayman Islands financial sector was in a very different position. The island population was a little over 27,000 – less than half its current size – and the concerns of the day were the potential effects of the Gulf War and the ongoing recession in America. While total assets were up, the number of banks and trust companies had declined marginally, the first decline in numbers since the early ‘70s. The seminal Mutual Funds Law was still only in its early stages of consultation and there were worries about the potential effect on banks by the recent decision by the US Federal Reserve Board to reduce its reserve requirements to zero.

Fast-forward to the present day and there has been an impressive evolution of Cayman’s financial services. The early history of the Cayman Islands finance sector has already been well documented; centuries of English common law and tax neutrality were updated in the 1960s with the enactment of a series of laws that laid out the basis for modern financial operations. The late 20th century marked the ascent of globalisation, when international trade in goods, services and financial capital became more widespread than ever before. Bolstered by its political, economic and social stability, the Cayman Islands was able to embrace these changes and write its own success story to become one of the top financial centres of the world. To this day, it remains a leading private equity and hedge fund jurisdiction, and continues to excel globally in banking, capital markets, trusts and fiduciary services.

While there were important milestones along the way, such as the introduction of the Sarbanes-Oxley Act and Basel II regime, the financial crisis of 2008 marked a significant change, with a notable increase in regulatory compliance obligations.

 

Click to view article


CAYMAN ISLANDS
Steven ManningChief Executive Officer – WPST +1 345 814 7612steven.manning@walkersglobal.com
Dorothy ScottManaging DirectorT +1 345 914 4202dorothy.scott@walkersglobal.com