Offshore banking is largely unprotected by the safety net national governments h

Question

Offshore banking is largely unprotected by the safety net national governments have imposed to prevent domestic bank failures. Many observers believe that the largely unregulated nature of international banking activity and global securities markets leaves the world financial system vulnerable to the collapse of financial institutions on a massive scale. Is this a real threat? If so, what measures have governments taken to reduce it? Compare and contrast international regulatory cooperation in the two principal pillars of finance: banking and securities.

Explanation / Answer

Answer:

Offshore banking is largely unprotected by the safety net national governments have imposed to prevent domestic bank failures. In the today's era of globalization, the biggest threat in the financial world is not the market risks but the government impositions in case of all such kind of banks financial systems. Thus , Offshore bank accounts are comparatively sometimes less financially secure. Offshore jurisdictions are often costly to visit, remote. So , in such cases physical access and access to information can be difficult which forms the biggest threat of offshore banks.

Offshore banking constitutes a sizable portion of the international financial system. Thus, keeping the demand for the same in mind, the government has taken some measures to remove the threats so formed which are enumerated as :

Further , international regulatory cooperation , in the terms of, banking and securities are well developed as they have made a revolutionary growth in the terms of Banking and security by providing increased growth rates, more advanced means and schemes to invest and savings of their earnings. On the other hand, these are less preferred as because of overseas security issues and differences in the government regulations impositions.

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