Location, Technology and the Development of OFCs

So far we have examined various factors that affect the development of offshore finance and OFCs: taxation, secrecy, bank regulation, and the role of the state, particularly the relationship of small territory to mainland. In addition, we examined OFCs in the Caribbean region. In this chapter we discuss another important issue — is location significant for OFCs? To do this, we ask two associated questions. First, why is there spatial unevenness in international banking, that is, what accounts for the geographical concentration in centres such as major cities like London and New York or in small territories? Secondly, what are the advantages to the financial services firms from this concentration?