Offshore finance centres are to blame for crisis, says Pope

THE Pope has put most of the blame for the international financial crisis on offshore centres such as Guernsey.

Benedict XVI is the latest high profile leader to turn the spotlight on the Crown Dependencies in the wake of the global economic turmoil.

His message came in a reflection paper from the Holy See in which he estimated that the global fiscal deficit caused by offshore activities could amount to £175bn - more than three times the amount of global development aid.

'To achieve a new financial agreement, a necessary first step should be to study carefully the hidden but crucial role of the offshore financial system in the light of the emergence of the global financial crisis and the inadequacy of development funding,' the paper said.

'Offshore markets were a significant factor in spreading the current financial crisis as they have given support to imprudent economic and financial practices. But they have also played a significant role in the imbalances of development, allowing a gigantic flight of capital linked to tax evasion. Offshore markets could also be linked to the recycling of profits from illegal activities.'