Introduction [Banking and finance in islands and small states]

Abstract

This volume contains a selection of papers presented at the International Conference on Banking and Finance in Islands and Small States held in Malta in January 1995. The main areas covered in the book relate to the emergence of offshore financial centres (OFCs), in particular the locational and jurisdictional factors that played a part in the development of such centres, the regulatory and deregulatory regimes in small state jurisdictions, and the economic benefits and costs that can be derived from offshore economic activity. Although none of the chapters of this book attempts to analyse what constitutes small size, and how size can be measured all of them assume that small economic size can pose serious economic constraints, principally lack of natural resources and inability to exploit economies of scale. This reduces the economic development options for the islands and small states concerned. As Carse argues in Chapter 9, such constraints may have been key factors in forcing many small jurisdictions to make their living in the world at large by 'engineering' a comparative advantage: that is, by using what resources and jurisdiction they have to supply products,such as financial services, for which there is an offshore demand.