The five 'Channel Islands' - Jersey, Guernsey, Alderney, Sark, Herm – represent a curious anomaly. Neither totally English, in the way people of Guernsey refer to the British mainland, yet so very British, and from one generation to the next, less and less Norman; nor a simple "in between" as their French name (Anglo-Norman Islands) might suggest.

The Channel Islands constitute a genuine historical, economic, social and political "curio," because they are fashioned from particular histories that are cultivated and perpetuated with care and attention. Their status was the result of an omission from a treaty of 1204 that demonstrates the lack of French interest in the maritime domain around 800 years ago. Since then, they have retained a specific and separate status within and alongside the two great realms, later the two great nations, of Britain and France. Currently, they do not belong to the European Union. They have lived through all the historic events and disturbances experienced by the two great countries, sometimes at a comfortable distance and sometimes in the front line, right up until the most recent, the Second World War. A "stone's throw" from the French coast, they have always been a refuge for exiles, whether from royal repression, the Reformation, the Revolution and the empires. The most famous of these exiles is was without doubt Victor Hugo, who pursued his writing for fifteen years, high above Saint Peter Port in Guernsey, while reviling Napoleon III's regime (he called him “Napoleon the Small”).

Until after the war, these were small rural and maritime economies. They experienced a major turnaround in the last third of the 20^th century, which propelled them into the world economy. This development only affected Jersey and Guernsey, the two largest of the five islands. Alderney and particularly Sark have remained apart from this evolution. They continue to develop their island personalities based on the conservation of rural tradition, in small close-knit communities that, while preserving the social relations of bygone times, are gradually and imperceptibly adapting them.

Guernsey and Jersey still have some agriculture, but profitability levels have almost wiped out the extensive greenhouse production that made their postwar reputations and brought in Portuguese seasonal workers, in the footsteps of Bretons and Normans. Space has become a rare, expensive commodity and the continuing construction, development and increasing density of residential and commercial land-use, represent a constant threat to the remaining agriculture.

Fishing remains important in the islands. Sustainability of fish stocks, historic rights, territorial sovereignty, so dear to islanders, and the importance of fishing around the Channel Islands for continental fishermen, are all interlinked and occasionally contradictory, requiring a measure of tolerance between neighbours. This is something that has been accepted between the Jerseymen and the French, who in 2000 concluded negotiations based on pioneer agreements in 1839-1843 relating to the recognition of a zone called Granville Bay, a cross-border area under joint management. Although there are few expectations, it is hoped that similar agreements will develop between Guernseymen and the French, in order to conclude the long series of incidents that have resulted in almost total absence of dialogue, and complete inflexibility for over a decade.

Outside these traditional occupations, the islands' major activity is oriented towards the financial service sector. Perhaps surprisingly, even tourism has diminished. From the Victorian era until the 1970s, the Channel Islands were a favourite destination for various sections of the British population. The more benign climate, the image of the islands and the crossing, neither too long nor too costly, made for a convenient change of scenery that was almost an extension of the south coast. Both the reality and the image were shaken by the increasing opportunities for travel to other tourist destination from the 1970s onwards. Today, although tourism is still significant, it has dwindled in importance.

Real estate has a more important role in the economy, but still lags far behind the financial sector, which dwarfs all others. Jersey and Guernsey have a financial sector entirely focused on the global market. A large proportion of the world's banking organisations deal with subsidiaries and banking establishments that are based in Guernsey and Jersey. Surprising though it may be, the volume of bank deposits held in the Channel Islands rivals amounts held in Paris, one of the most important financial market places in Europe and indeed the world.

The Channel Islands' financial sector, which grew rapidly during the second half of the 20^th century, was first of all built on the conventional management of bank funds with various advantageous forms of tax relief and guaranteed discretion. Over the years however, with the evolution of international finance markets combined with the efforts of states and other organisations to combat money laundering, the Channel Islands have sought to provide the surety of sound management and improved transparency, whilst retaining their reputation for discreet efficiency. The Channel Islands have continued to rely on the administration of trusts and capital and have developed various areas of financial management. Their cultural proximity to the large London financial market, together with their legal and tax facilities, have enabled them to carve out a niche in the domain of sophisticated legal structures for companies, insurers and re-insurers.

This great volume of activity attracts an influx of persons and exchange of information linked to the financial sector at a scale that might seem out of proportion to the size of these small islands. Telecommunications, which are the fundamental support system for this virtual economy, are of course not visible, but the large number of air links bears witness to this remarkable integration into the virtual community. There are no less than fifteen daily flights from each airport to London, as well as one to Zurich.

Associated with this powerful reality of being open to the world but essentially offshore to Europe, the Channel Islands continue to be deeply rooted in their maritime and coastal heritage: they are still a favourite destination for British and French leisure sailing, and the activity in the ports of Saint Peter Port and Saint Helier remain an important part of daily life.

Fishing, conflicts over maritime jurisdiction, dangerous zones for maritime traffic, the continuation of local life within small communities, all contribute to one side of the islands' existence. But on the other side, the financial sector, though a product of its geographical location, has developed to the point of having almost left it behind, and is genuinely offshore; and in the Channel, offshore is not oil, it's finance.