Offshore banking confidentiality on the one hand it’s the major tool of the offshore sector and on the other hand it is its greatest enemy. In many circumstances offshore banking privacy is the factor often called into question. Nonetheless confidentiality in offshore banking sector is crucial. The importance of offshore banking privacy determines the level of investment in a country’s financial institutions.
There is little doubt that many times banking confidentiality was used to conceal illegal activities and frauds. In this context offshore banking secrecy appears as an obstructionist element in relation to the collection of taxes and hinders the monitoring ad detection of financial crimes such as money laundering, profits of crime and other illegal or unethical activity.
Bank secrecy is the basis of the offshore confidentiality and at the same time the most controversial one. Legal rules on 
offshore banking confidentiality, where both the identity of account holders and the amounts held in their accounts are often confidential, represents obstacles to financial regulations. At the same time bank confidentiality more than any other principle has the potential to impair the efficient investigation and interdiction of onshore illegal activity. Also offshore banking confidentiality makes it difficult for strict bank supervision to take place.
Of course offshore banking privacy is not absolute. A total confidentiality in offshore banking business is not essential to its survivable or viability. When we talk about bank secrecy in offshore sector we have to talk about its degree.
It seems that banking confidentiality has very old origins and dates back to Roman times when temples were like banks.
Nowadays we can refer to 2 models of offshore banking secrecy. The first one is called the statutory model and the second model is characterized by a common law flavor.
The first model is characteristic to the offshore banking industry and has Swiss roots. It has to be commenced that Swiss are responsible for the birth of the offshore banking sector. Although Switzerland is closely identified with bank secrecy laws the confidentiality principle itself is not link with the banking sector but rather comes from the general right to financial privacy under the Civil Code. Here the banking confidentiality comes from 3 legal principles, namely: the right to privacy; the contractual relationship between costumer and banks; specific statutory provisions governing banking confidentiality.
The Swiss concept of banking privacy was transplanted to many offshore banking centers. There are a set of regulations that in the majority of offshore jurisdictions that deals with this issue, thus it can be concluded that this area is mainly codified. Usually such laws come along with both criminal and civil penalties.