Crown Dependencies 'help to fund mainland banks'

The Crown Dependencies play an important role in financing UK banks on the mainland, it has been claimed.

Ronnie Ludwig, partner at accountants Saffery Champness, told the Times the financial sectors of Jersey, Guernsey and the Isle of Man ’route significant capital flows into Britain’.

He said that although low tax rates may be a factor for some businesses using Crown Dependencies for their banking, many depositors are doing business in difficult locations and therefore choose the islands for asset protection.

’The funds are reinvested in British banks,’ he told the newspaper.

Mr Ludwig’s comments were made in response to the British Offshore Financial Centres report published by Michael Foot last week.

The study reviews financial centres in overseas territories such as the Cayman Islands, Bermuda and the British Virgin Islands, as well as the Crown Dependencies.

It states that offshore centres must meet international standards of financial regulation and tax information exchange, as well as encouraging them to diversify their tax bases.
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