Your Own Offshore International Bank

Your Own Offshore International Bank

We can arrange the setting up of your own offshore international bank in any of a number countries, including our personal recommendations, namely St. Vincent & the Grenadines and Dominica, both in the Caribbean.

Offshore international banks have remained relatively stable while banks in the developed world have experienced all kinds of trauma in recent years because banks in the developing world have not exposed themselves to the toxic debts that have devastated the banks in the developed countries.

Offshore international banks are less likely to be involved in money laundering and the financing of terrorism than the banks of Europe and America, in spite of attempts to stigmatize them with such labels. This has been so while these offshore banks have been operating creditably in the mainstream of international finance.

Why This is the Right Time for Your Offshore International Bank

The aggressive attacks on the offshore sector in recent years by the Organization for Economic Cooperation and Development (OECD), Financial Action Task Force (FATF), and the G-20 Group of Nations caused many to think that the offshore business was on its death bed.  Nothing could be further from the truth.  Multinational corporations continue to use loop holes in the law to minimize their taxes and it is now openly acknowledged that the offshore industry is here to stay.

Developments in the banking sector in North America and Europe clearly indicate that all is not well in their backyard and that this presents a solid case for offshore banks to fill vacant needs. Over the 5-year period, 2003 – 2007, the list of problem banks in the US averaged 75 banks per year.  But as of early 2014 the list of problem banks stood at 467.

In spite of the bailouts of banks during the recent financial crisis (2007 – 2009) 493 banks failed.  It was fortunate that there was no run on banks during that crisis and the Savings and Loan debacle.  The FDIC Insurance of accounts covers only $250,000.  If an investor wishes to protect $1 billion, he would have to spread it over 4,000 different bank accounts.  According to the FDIC the ideal amount to have in balance is $120 billion.  Its audit in May 2014 showed a balance of only $37.9 billion which is to say that it was then short by over $80 billion.

During the financial crisis the US government used $27 billion to bail out the largest banks.  These are the very banks that reportedly caused the financial crisis.  It was caused primarily by banks lending mortgage funds to borrowers who were not pre-qualified and were not capable of repaying their loans.  The masses of mortgages were divided up into packets that were sold to other banks.  When mortgages could not be repaid it had a domino effect that engulfed the large banks and all other banks exposed to the swindle.

The top executives of some of the largest banks made out like bandits.  They collected obscene salaries.  The $27 trillion came as a golden parachute to save the banks that were too big to be allowed to fail.  The people of America got none of this money which could have given every citizen $100,000.  Instead, their offspring have been saddled with repaying a debt that can never be fully liquidated.  The can has been kicked down the road.  There can be some easing of the pain by inflating the currency, but this can only result in an increasingly lowered standard of living for Americans and it will be compounded when the US dollar loses its status as the world reserve currency.  There are growing calls for this and some nations have already begun to conduct bilateral trade in their own currencies.

A grim reality is that the return on funds in US banks is abysmally low.  According to a recent report in Bank.com, the ten largest banks in the US showed annual percentage yields on money market funds of only 0.11% and annual yields on interest bearing accounts of 0.05%.  One-year CDs are paying 0.23%.  When inflation is taken into consideration investors are losing the purchasing power of their money big time.

As a result, billionaire investors are moving like lemmings to dividend paying stocks and many are moving their funds offshore.   According to Wall Street Daily, quoting the research firm Audio Analytics, the amount of profits moved offshore during the last five years has increased 70%.  According to Wall Street Daily (May 12, 2014) the Cayman Islands had more money passing through its banks than Japan, which is an economic powerhouse. Profits held by America’s ten largest companies in Cayman Island banks are ten times the GDP of that country.  So as watch dog bodies legislate measures to curb tax evasion, the multinationals are redoubling their efforts to hold on to their profits.

Recent problems in Cyprus that involved government seizure of depositors’ money to bail out banks have led to worldwide concern that this could become the norm for banks that are “too big to fail”.  This is not an isolated case.  Other countries are open to similar scenarios to solve their own problems.  The following examples reported in the news media are instructive:

In March 2013, the Open Bank Resolution finance minister of New Zealand, Bill English, proposed a Cyprus style solution for potential New Zealand bank failures. The reserve bank was then in the final stages of establishing a rescue scheme which will put all bank depositors on the hook for bailing out their banks. Depositors could overnight have their savings shaved by the amount needed to keep distressed banks afloat.

October 2008 – Argentina’s leftist government, facing a gigantic revenue shortfall, proposed to nationalize all private pensions so as to meet national debt payments and avoid its second default in the decade.

November 2010 – Headline – Hungary Gives Its Citizens an Ultimatum: Move Your Private Pension Fund Assets to the State or Permanently Lose Your Pension – This is an effective nationalization of all pensions.

November 2010 – Ireland elected to appropriate ten billion euros from its National Pension Reserve Fund to help fund an eighty-five billion euro rescue package for its besieged banks. Ireland also moved to consider a regulatory move that compels some private Irish pension funds to hold more Irish government debt, thereby providing the state with a captive investor base but hugely raising the risk for savers.

December 2010 – France agreed to transfer twenty billion euros worth of assets belonging to its Fonds de Reserve pour les Retraites (FRR), the funded portion of its retirement system, to help pay off recurring social benefits costs. No pensioners are consulted.

April 2012 – Argentina announced that its Economy Ministry has taken an emergency loan from the national pension fund in the amount of $4.3 billion. No pensioners were consulted.

June 2012 – Treasury Secretary Timothy Geithner unilaterally appropriated $45 billion from US federal pension funds to help tide over US deficits for the remainder of fiscal year 2011.

January 2013 – Treasury Secretary Geithner again announced that the government has begun borrowing from the federal employees pension fund to keep operating without passing the approaching “fiscal cliff” debt limit. The move effectively created $156 billion in borrowing authority from federal pension funds.

Depositors have no recourse against banks because when they make deposits, the bank becomes the owner of the money and can invest it as they see fit.  The British House of Lords passed on this many years ago.

In 1848, the House of Lords stated it thusly:

“Money, when paid into a bank, ceases altogether to be the money of the principal; it is then the money of the banker, who is bound to an equivalent by paying a similar sum to that deposited with him, when he is asked for it… The money placed in the custody of a banker is, to all intents and purposes, the money of the banker, to do with it as he pleases; he is guilty of no breach of trust in employing it; he is not answerable to the principal if he puts it into jeopardy, if he engages in hazardous speculation; he is not bound to keep it or deal with it as the property of his principal, but he is, of course, answerable for the amount, because he has contracted.”

The trend will unsettle depositors in banks in the industrialized nations and will cause them to withdraw their money and place it in places perceived to be safer, as well as in alternative investments such as precious metals and real estate.

The only way that a bank can reassure depositors is to publish its balance sheets so that its depositors are constantly aware of the level of risk that they are facing.  This is what your offshore international bank will need to do in order to attract and retain funds from depositors who are concerned about losing their hard earned wealth.

The time is right for your own offshore international bank.  Contact us today to help you establish your own offshore bank.  Email: info@abacoltd.com