Co-operation between regulators will be more effective than 'arbitrary' capital requirements on offshore subsidiaries or parents to mitigate 'risky' upstreaming practices, the Isle of Man (IOM) Government says.
Many banking operations in the Crown Dependencies use the practice of upstreaming a large percentage of deposits from customers for treasury management by the parent company. But the practice has come under scrutiny from the Foot Review, due in September, which is investigating the risks of upstreaming, after the collapse of Kaupthing Singer & Friedlander Isle of Man in October 2009, which some blame on the practice. In the interim review, Michael Foot said he will probe "the interdependence between the UK and the financial centres," manifest in the "substantial" flows of business from...
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