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for as long as States members are not full-time and salaried it is almost inevitable.” The answer that had been put forward, Powell said, was to set up a Jersey Financial Services Commission to supervise the finance industry—though that, he conceded, may not be very different. “The Commission will include those who have a direct interest in the finance industry.” The answer, Powell said, was to make sure that those in the future commission would not be involved in particular areas where they had a conflict of interest, and that the matter should be debated further. (Letter from Colin Powell, O.B.E, Chief Adviser to the States, to Senator P.F. Horsfall, President, Finance and Economics Committee, October 25, 1996.)

34.“Finance: Damage Might Be Done to Jersey’s Reputation,” Jersey Evening Post, February 15, 1996.

35.Accountancy Age, March 29, 2001, p. 22.

36.Prem Sikka and Hugh Willmott, “All Offshore—The Sprat, The Mackerel, Accounting Firms and the State in Globalization,” Essex Business School Working Paper No. WP 09/05, February 2009.

37.Luca Errico and Alberto Musalem, “Offshore Banking: An Analysis of Micro- and Macro-Prudential Issues,” IMF, January 1999. Also: “Favourable regulatory treatment in OFCs increases the operational leeway of offshore banks for balance sheet management,” the IMF said: “exemptions from reserve requirements on deposits; liquidity requirements; liability and asset concentration restrictions; capital adequacy thresholds; and stringent foreign exchange position limits, allow offshore banks to more freely manage their balance sheets.”

38.For example, in When Genius Failed, Roger Lowenstein’s otherwise excellent analysis of the episode, the offshore structure is almost ignored. Roger Lowenstein, When Genius Failed (New York: 4th Estate, 2002).

39.See, for example, “Report on Special Purpose Entities,” the Bank for International Settlements, September 2009.

40.As the BIS report puts it: “The onshore (Delaware) versus offshore (Cayman) decision will generally be driven by factors outlined in the previous section (on tax considerations of SPEs), while other (non-taxation related) considerations (such as clarity of legal regime, ease of incorporation, etc) will generally be similar to those outlined for European SPEs immediately above.” Note that “clarity of legal regime” and “ease of incorporation” stem specifically from these jurisdictions’ offshore status, as defined in this book.

41.See Jim Stewart, “Shadow Regulation and the Shadow Banking System: The Role of the Dublin International Financial Services Centre,” Tax Justice Focus 4, no. 2 (July 18, 2008); and Jim Stewart, “Low Tax Financial Centres and the Subprime Crisis: The IFSC in Ireland,” presentation, Tax Justice/AABA research workshop, University of Essex, July 3–4, 2008. Also, draft version of Jim Stewart, “Low Tax Financial Centres and the Financial Crisis: The Case of the IFSC in Ireland,” May 15, 2010.

42.Dublin’s lures for the shadow banks were not especially its low-tax regime—though that helped—but other features: Ireland’s wide array of tax treaties, and the fact that it ticks certain boxes that fund regulators require in their home countries, including the fact that certain EU directives apply. Being within the Euro currency zone is also crucial.

43.See Goldman Sachs, “Abacus Prospectus and Abacus Indicative Terms,” February 26, 2007, http://www.scribd.com/doc/30054003/Abacus–2007-AC1-INDICATIVE-TERMS.

44.Goldman’s offshore deals deepened global financial crisis: “Goldman’s Offshore Deals Deepened Global Financial Crisis,” McClatchy’s, December 30, 2009.

45.Author’s interviews with Elmer, 2010.

46.“Debt Bias and Other Distortions: Crisis-Related Issues in Tax Policy,” IMF Fiscal Affairs Department, June 12, 2009.

47.2003–2007 data from the IMF and from “Private Equity Fund Raising up in 2007: Report,” Reuters, January 8, 2008.

48.Julie Cresswell, “Profits for Buyout Firms as Company Debt Soared,” New York Times, October 4, 2009.

49.Andrew G. Haldane, “Small Lessons from a Big Crisis,” Bank of England, May 8, 2009.