Politicians from New York District Attorney Robert Morgenthau to British Prime Minister Gordon Brown are blaming offshore financial centers (OFCs) for contributing to the current global financial crisis by failing to adequately regulate their financial industries. These criticisms are mistaken for three reasons. First, OFCs offer different rather than less regulation. Since most OFC financial products are aimed at sophisticated and institutional investors, OFC regulators are less concerned with protections for retail investors than are regulators in jurisdictions like the United States. This enables them to adopt less costly regulations that are still effective at preventing fraud and other financial crimes. Second, OFCs play a particularly important role in providing regulatory competition. OFCs have innovated in areas of law from captive insurance to trusts, pushing onshore jurisdictions like the United States to respond. For example, Vermont has innovated in captive insurance in response to competition from Bermuda and the Cayman Islands. Third, OFCs provide an important means for onshore jurisdictions to price discriminate in their taxation. Without OFCs, companies based in high tax jurisdictions like Canada, France, and the United States would find it more difficult to compete internationally with companies from lower tax jurisdictions. Preserving OFC-competition thus benefits onshore jurisdictions.