The Spider's Web: London as the hub

In 1955 Midland Bank took US dollar deposits in London, an early stage of the Eurodollar market. How London came to sit at the centre of the offshore map, as the film and book argue, how a chain is built, and what UK registers now show.

Charles Pycraft · November 2026 · London

Cover card: The Spider's Web, London as the hub. A gold web with a city at its centre and islands around it. An investigation by Charles Pycraft

In June 1955 the Bank of England became aware of an important development at Midland Bank. Midland was taking in US dollar deposits that were not linked to financing its customers' trade, paying more than American banks were allowed to pay under the US ceiling on deposit rates, known as Regulation Q, and swapping the dollars into sterling. The Bank of England raised concerns, but in the end it allowed London banks to carry on taking such deposits. Foreign currency deposits were not new to London; what changed was how banks used dollar funding. The economic historian Catherine Schenk, writing from the Bank's own archive in 1998, identifies this as the first stage of what became the Eurodollar market: dollars held and lent in London under a regulatory framework different from domestic banking arrangements in the United States or Britain. Earlier accounts dated the market from Britain's 1957 sterling controls; Schenk places its first stage two years earlier. London became the centre of that market.

The Spider's Web: Britain's Second Empire, a 2017 documentary written and directed by Michael Oswald and co-produced with John Christensen of the Tax Justice Network, argues that this mix of strict rules at home and relative freedom for international money became a lasting pattern. Oswald has said the film was inspired by Nicholas Shaxson's book Treasure Islands. This field note turns to London, which the film and the book both place at the centre of the map.

The argument in plain terms

Where the web began: in 1955 Midland Bank took US dollar deposits in London, which Schenk (1998) identifies as the first stage of what became the Eurodollar market. Simplified from Schenk (1998) and the St. Louis Fed (2022).
Where the web began: in 1955 Midland Bank took US dollar deposits in London, which Schenk (1998) identifies as the first stage of what became the Eurodollar market. Simplified from Schenk (1998) and the St. Louis Fed (2022).

The case made by Shaxson and the film runs like this. As the British Empire wound down after the Second World War, the City of London kept and grew its role as a financial centre by serving money from elsewhere. A ring of places with constitutional links to Britain, the Crown Dependencies close in and the Overseas Territories further out, developed company, trust and banking laws that attracted that money. Each has its own legislature, courts and regulators. In the model described by the film, business booked in those places was often arranged, advised on or managed through London.

The film's own synopsis says that up to half of global offshore wealth may be hidden in British offshore jurisdictions. That is the film-makers' estimate, not an official figure, and it should be read as such. The film and the book argue that the point does not depend on the exact number: in their account, London supplies the lawyers, banks, accountants, trust companies and courts, and the islands supply the legal vehicles.

Oliver Bullough's Butler to the World (2022) makes a related argument about Britain itself: that the country made a business of serving wealthy people from abroad, with discretion as part of the service.

The web around London as described by the film and the book: the Crown Dependencies close in, the Overseas Territories further out, and the milestones from 1955 to 2025.
The web around London as described by the film and the book: the Crown Dependencies close in, the Overseas Territories further out, and the milestones from 1955 to 2025.

How a London-centred chain is built

An illustrative chain is simple to draw and can be hard to see from outside.

Each step can be lawful, and many such structures are used for ordinary family and tax planning reasons. Legal ownership, economic benefit and control may each sit with a different party. Critics argue that cross-border structures like this can complicate oversight, because the adviser is regulated in England, the trustee in an island and the company in a territory, so effective supervision depends on cooperation and information sharing between them.

A simplified London-centred chain: adviser in London, trustee in a Crown Dependency, company in an Overseas Territory, asset back in the UK. An illustration, not a universal structure. Each step can be lawful; supervision may be divided across jurisdictions.
A simplified London-centred chain: adviser in London, trustee in a Crown Dependency, company in an Overseas Territory, asset back in the UK. An illustration, not a universal structure. Each step can be lawful; supervision may be divided across jurisdictions.

The trust layer

The most private part of the chain is often the trust. A settlor transfers assets to a trustee, who holds them for beneficiaries under the terms of a trust deed. In a discretionary trust the trustee decides which members of a defined class of beneficiaries receive income or capital, and when.

Many offshore trusts also have a protector, a person or firm whose powers depend on the trust instrument and can include consenting to distributions or replacing the trustee, and a letter of wishes, a private note from the settlor that guides the trustee but is not usually binding. Neither is automatically evidence that the settlor still controls the trust, but each is a place where influence can sit without appearing on a public register. UK anti-money laundering rules take a wide view: the Money Laundering Regulations 2017 treat the settlor, the trustees, the beneficiaries and any individual with control over a trust as its beneficial owners, and trusts within scope must record them on HMRC's Trust Registration Service, which is not public.

The public record shows why the professionals in these roles matter. The Panama Papers, Paradise Papers and Pandora Papers were drawn largely from the records of law firms and corporate or trust service providers. In England and Wales the Solicitors Regulation Authority publishes its disciplinary decisions, including fines against firms for anti-money laundering failures such as not checking where client money came from. Trustees and trust professionals act under fiduciary duties, regulation and the oversight of the courts, which is why their supervision is a recurring subject of public reports and disciplinary decisions.

When the web was used

The Azerbaijani Laundromat, published in September 2017 by the Organized Crime and Corruption Reporting Project, Berlingske, The Guardian and other partners, reported how ordinary British vehicles sat at the centre of what the consortium described as a money laundering and lobbying scheme. According to the reporting, leaked bank records showed that about US$2.9 billion passed between 2012 and 2014 through four UK-registered limited partnerships and limited liability partnerships, with accounts at the Estonian branch of Danske Bank. Two were Scottish limited partnerships registered at addresses in Glasgow. The reporting said their partners were anonymous entities in the British Virgin Islands, Seychelles and Belize, and that the owners and directors named in their filings were not the real people in charge. On that account, a UK registration gave the companies a respectable address but did not tell anyone who controlled them. Scottish limited partnerships were brought into the people with significant control regime from 26 June 2017, after the period the reporting covered.

Watched, then exposed

London is also where much of the web has become visible, the through-line of this series.

These developments improve access to information, but they do not remove every limitation associated with cross-border ownership structures. HMRC's Trust Registration Service is not public, island trust registers are not open, and a register is only as reliable as what is filed on it. But the map the film and the book drew can now be checked against registers, judgments and published leaks.

Who can see what: the public UK registers, the records available on application, and the layers that stay private.
Who can see what: the public UK registers, the records available on application, and the layers that stay private.

What to check if a London chain is in front of you

Next in the series: Jersey, Guernsey and the Isle of Man, London's inner web.

Sources

This field note draws on public legislation, government guidance, court materials, academic history, books, documentary film and investigative journalism. It is provided for general information and is not legal or tax advice.

Sources