ABSTRACT
In the changing environment surrounding global financial markets, conditioned by American dominance in the middle of rigid regulatory constraints, tax burdens, political suspicion, and many other adscititious factors, offshore banking centers mushroomed from the late 1950s onward. Entrepôt centers and eurocurrency came into existence to satisfy the regulation-choked investors, transnational enterprises, and communist countries such as the then Soviet Union and its satellite countries which wanted to keep dollars, but not under the jurisdiction of the United States. Offshore deposits grew into trillions of dollars in less than half a century. Many estimates are available from the Bank for International Settlements (BIS) and from Morgan Guaranty's regular surveys, and useful analytical as well as empirical studies abound in the existing and ever-growing literature. The early studies by Einzig and Quinn (1977), Duffey and Giddy (1978), McCarthy (1983), followed by more recent research by Park and Essayyard (1990), Roussakis et al., (1994), and many others, have given excellent treatments to various facets of offshore markets, the reasons for their rapid growth, and prospects in this new market morphology.
