Following the First International Conference of Banking Supervisors held in London in 1979, the Basel Committee on Banking Supervision decided that there would be virtue in initiating a meeting of banking supervisors representing offshore centres. The end of the 1970's had seen considerable expansion of international loan activity with many loans being booked through Offshore centres for tax reasons. The Basel Committee member countries were concerned that the banks for which they were responsible were at risk because it was feared their subsidiaries or branches in offshore centres, through which loans were booked, were not subject to a sufficient standard of supervision.
The Offshore Group was formed in October 1980, at the instigation of the Basel Committee on Banking Supervision, as an association of the relevant authorities in jurisdictions identified at that time as 'offshore finance centres' concerned with the supervision of banks and related financial services primarily engaged in cross-border activities. The first meeting of the Offshore Group was held in Basel when representatives of a number of offshore centres met with members of the Basel Committee. The proposal to form an Offshore Group was welcomed by all concerned.