Banking regulations (such as, risk-based capital framework and reserve requirements) have had the unintended consequence of incentivizing banks to hold more sovereign debt on their balance sheets than suggested by their strategic motives. As a result, bank stability now depends more heavily than...

This paper investigates offshore financial centers in the Caribbean from the perspective of offshore economies, onshore economies, and international investors. Using multilateral data on the international positions of banks, we analyze the flow of funds that has been transferred from the major...