From Prof Jeffrey D. Sachs.
Sir, I wonder whether the Cayman Islands leadership knows that it is playing with fire (“Great progress by Cayman Islands”, Letters, May 2). It writes that everything is under control, that my concerns are more influenced by Hollywood movies than hard fact.
Well here are a few hard facts. There are 57,000 residents in the Caymans, yet the Cayman authorities report 92,000 corporations registered there. There are roughly 10,000 hedge funds.
The Bank for International Settlements reports that the Cayman banking system has roughly $1.4tn in liabilities and assets, or $24m per resident. Cayman Island board members often sit on dozens or even hundreds of boards, offering essentially no oversight or accountability.
This house of cards is a mortal threat to the world economy, as well as an abuse of basic financial practices. It is a playground of Wall Street and European politicians and it is reckless.
I have no problem with the Cayman Islands developing its financing expertise and housing a financial industry commensurate with its size and its capacity to protect the world from abuses and upheavals.
Instead, it is being used by powerful and out-of-control forces vastly beyond the Caymans’ capacity to regulate, monitor or backstop in the event of crisis. A blow-up in the Caymans’ finances would make Cyprus’s crisis look like child’s play.
Jeffrey D. Sachs, Director, The Earth Institute, Columbia University, New York, NY, US
- The End of AIDS
- Big innovations require big investment
- US must transition to low-carbon energy
- Donald Trump and the rebuilding of America
- Prosperity in sustainability