THE ECONOMIC IMPACT OF OFFSHORE BANKING CENTERS ON THE HOST COUNTRIES: WITH SPECIAL REFERENCE TO THE FEASIBILITY OF ESTABLISHING AN OFFSHORE BANKING CENTER IN KOREA (INTERNATIONAL, BUSINESS).

摘要

The purpose of this study was to evaluate the economic impact of an offshore banking center (OBC) on its host country, with consideration of the feasibility of establishing an OBC in Korea. An in-depth analysis of the benefits and costs arising from hosting an OBC was made, along with a comparative analysis of five selected OBCs (the Bahamas, Bahrain, Panama, the Philippines, and Singapore) and a feasibility study of establishing an OBC in Korea.; It was found that benefits attributable to hosting an OBC can be classified as direct or indirect. Direct benefits include employment, taxes and levies, and operating expenditures of offshore banks. Indirect benefits involve capital inflow, stimulation of development of the domestic banking industry, internationalization of domestic banks, development of local expertise in international finance, and development of related industries (such as insurance companies, money brokers, merchant banks and investment companies, and international legal and accounting firms). The enhancement of national prestige and security is also an important indirect benefit.; Costs incurred from hosting OBCs can also be classified as direct or indirect. Direct costs consist of expenditures on telecommunications infrastructure, supervision and administration, and education and training. Major indirect costs include the disrupting impact on monetary policy, the adverse impact on domestic interest rates and economic policy, capital leakage, fiscal problems, inflationary effects, and the inflow of speculative offshore funds.; It was found that the five OBCs with dissimilar characteristics have experienced different sets of benefits and costs.; The expected benefits of having an OBC to the economy of Korea include capital inflow, internationalization of domestic banks, development of domestic banks, and enhancement of national security. Related costs involve capital leakage, inflow of speculative offshore funds, and adverse impact on domestic interest rates and monetary policy. The analysis demonstrates that benefits outweigh costs, and thus the establishment of an OBC in Korea is feasible.