1. How did SIB’s status as an “offshore bank” facilitate Stanford’s alleged fraud?
One reason is that the SIB’s status as an “offshore bank”, is that the bank did not have to follow any of the U.S. laws or regulations. Also the fact that it only had a portion of the assets of a multi bullion dollar company helped.
2. Why would investors be willing to sacrifice immediate access to the funds they deposited with SIB?
It is because they wanted more return for their money. Since they expected above average interest rates, they had no reason to want their money in the short term. Competitors did not have that option, so they stayed with SIB. Any person would take 100$ tomorrow than 50$ today.
3. What elements were missing from the governance structure
One reason is that the SIB’s status as an “offshore bank”, is that the bank did not have to follow any of the U.S. laws or regulations. Also the fact that it only had a portion of the assets of a multi bullion dollar company helped.
2. Why would investors be willing to sacrifice immediate access to the funds they deposited with SIB?
It is because they wanted more return for their money. Since they expected above average interest rates, they had no reason to want their money in the short term. Competitors did not have that option, so they stayed with SIB. Any person would take 100$ tomorrow than 50$ today.
3. What elements were missing from the governance structure