LAST YEAR TIMOTHY RIDLEY, a Cayman-based offshore grandee, mused publicly on whether OFCs would thrive over the next decade or might "go back to tourism, fishing and rope-making...until global climate change finally sinks them." He foresaw three possible scenarios: "doomsday," a catastrophic decline as countries introduced policies that eliminated the need to use havens, such as sharp tax cuts; "nirvana," the continued growth of such centres, driven by increased financial globalisation and continued regulatory and tax arbitrage; and "curate's egg," a mix of the other two, in which some flourish and others wither amid stop-start efforts by big countries to whittle away the advantages they offer. The third, Mr Ridley concluded, was the most likely. In 2009, when the G20 seemed determined to bring tax havens down, that prediction would have looked optimistic. Now it seems about right. By and large, offshore centres have been spared the invidious choice they were supposed to be facing: embrace regulatory standards that undercut their main selling points, or reject them and be locked out of major markets. They have proved adaptable, finding new clients in emerging markets and carving out new product niches, some of them outside finance. Mauritius, for instance, hopes to become an international arbitration centre. Cayman has set up a special economic zone to develop medical tourism. The history of tax havens is littered with existential panics that proved overblown. Mr Ridley recalls fears in the 1970s that America would strangle Cayman by cutting off air and commercial links. Robert Mathavious, the BVI's financial regulator, chuckles when recounting predictions after the OECD's 1998 crackdown that only half a dozen havens would survive. In fact, hardly any of them shut up shop. Some newcomers, such as Samoa and the Seychelles, have done well on the supposedly outdated strategy of offering basic shell companies shrouded in secrecy. Barriers to entry for new OFCs are said to have risen sharply because of higher compliance costs, but the evidence suggests otherwise. Company registries are cheap to set up; some, such as the BVI's, now stay open round the clock for the customers" convenience. Other jurisdictions" corporate laws are easily copied, sometimes including the spelling mistakes. That is not to say that the big countries" latest push for transparency can be ignored. It is still a work in progress, but the move towards more, and more systematic, exchange of client information will not be reversed. America's FATCA, and the FATCA-lites elsewhere, are here to stay. So is the pressure for more clarity on the beneficial ownership of corporate vehicles, and for more regulation of offshore service providers. Tax-fairness campaigners reckon that all this is part of a necessary realignment. As they see it, international tax policy and regulation are at last beginning to catch up with the OFCs, which flourished mightily during a quarter-century of laissez-faire financial expansion, allowing big banks, companies and the wealthy to skew the benefits of globalisation. An official in Jersey acknowledges that this movement constitutes "a very powerful current." The island's financial regulator, John Harris, says criticism from Britain's politicians and media has left Jersey "fighting for its life." OFCs will always live precariously, not least because much of what they do can be damaged or destroyed at the stroke of a pen. Businesses often move offshore because of a particular tax law or regulation onshore, which may later be reversed. The Netherlands Antilles" financial sector was trounced by America's decision in 1987 to terminate a tax treaty that had encouraged international lending to flow through the islands. More recently hundreds of billions of dollars in short-term "sweep" deposits at Cayman banks flooded back to America after the Dodd-Frank act in 2010 permitted the Federal Reserve to pay overnight interest on demand deposits. Predicting the future level of hostility from onshore governments is tricky, too. America and the European Union have shifted their stance several times over the past decade, depending on what was politically expedient. After the September 11th 2001 attacks tax havens took a beating for supposedly helping to finance terrorism. A few years later they became "partners" in tax-transparency negotiations, but after the 2007-08 financial crisis they were branded as dangerous again. Now that the world economy is no longer staring into the abyss, they might hope to be treated with less suspicion by the countries traditionally least friendly to offshore, such as France. Clients, clients everywhere In future, however, the tax havens will need to take as much note of attitudes in large developing countries as in the OECD stalwarts. They understand that the balance of power in global economic governance is shifting, which is why they have lately been trying to forge high-level regulatory and political relationships in Asia and Latin America. They are relieved that China, with Hong Kong and Macau under its wing, seems less hostile to offshore finance than Western governments currently are. India and Brazil, though more critical, take a pragmatic approach. India became aware of the dangers of trying to interfere with a popular tax haven last year when it sought to rewrite a tax treaty with Mauritius that had caused large amounts of inward investment into India to be routed via the island. Financial markets went into a deep dive at the prospect and India had to moderate and delay its move. Harmonisation of financial rules looks as far away as ever. And where there are differences in national tax rates, regulatory standards and confidentiality laws, there will be opportunities for "international financial centres" to offer "legitimate arbitrage" - or, as their detractors see it, for "secrecy jurisdictions" to provide "boltholes" that allow elites to undermine their home countries" policies. Offshore financial centres are not ready to sink into the sea yet.