The international tax system, designed a century ago, has not kept pace with the modern multinational entity, rendering it ineffective in taxing many modern businesses according to economic activity. There are difficulties associated with the application of the traditional international tax regime to traditional multinational entities, and these are exacerbated when the same regime is applied to sectors of multinational entities which are considered non-traditional businesses. One of the modern multinational entities where this is most evident is the multinational financial institution (MNFI). The recent global financial crisis provides a particularly relevant and significant example of the failure of the current financial system on a global scale. However, because MNFIs are intermediaries that facilitate foreign investment, the activities of these multinational entities continue to impact the economies of developing nations, and this is particularly evident in the context of taxation. Unlike mining, tourism and manufacturing, the finance and banking industry is not generally considered to be a primary participant in the economic growth of developing nations. However, its influence on that growth cannot be underestimated.