ABSTRACT
This chapter presents the analysis of the Panamanian banking system, it should come as no surprise that the Cubans decided on Panama as a location for their offshore activities. Despite its secret and largely inscrutable nature, there are some facts which are known about the offshore tax havens in general and those in the Caribbean in particular. Certainly part of the explanation is the fierce competition coming from a plethora of new offshore centres in the Caribbean, and the Atlantic. But another reason points to the double-edged sword that much of the offshore business represents. Offshore centres are now an integral part of the world's economy with as much as half of the world's money deposited in these centres or transiting through them. This reality leads to a certain resigned 'realism' among those who have to administer these offshore banking havens.
