Trimingham. The economic message is a sobering one for Bermudians.

A global financial crisis, which could push the world into the next depression, could more immediately place Bermuda in deeper trouble with Organisation for Economic Co-operation & Development (OECD) countries, a leading retailer and banker has said.

Chairman of the Bank of Bermuda Eldon Trimingham led the Island's flagship institution, the Bank of Bermuda, this month in meetings in Hong Kong and Singapore. He admits to being disturbed by what he saw.

Bermuda is among a list of countries that have faced increasing pressure from onshore governments, as more and more of the world's capital has been lured offshore to tax-advantaged jurisdictions.

Continental governments have been seeking ways to not just reduce the loss in direct taxes from the reduction of deployed onshore capital, but also the loss in significant indirect revenues that flow from such deployment.

The OECD is just the latest avenue being explored to make countries like Bermuda explain why they should be allowed to continue to absorb such funds, to the disadvantage of the capital's country of origin.

Bermuda's case is being argued by a Government team led by Premier Pamela Gordon.

But Mr. Trimingham said, "The world's current financial difficulties will increase the pressures on our OECD problem. If there is a downturn in Europe, finance ministers over there will be rushing about looking for new ways of raising revenue.

"This contre-temps we are having with the OECD is really based on tax. They would just as soon wish Bermuda, Cayman and these other offshore jurisdictions would go away.

"The whole thing for onshore governments, is to get back all those taxes they are losing. If we have a recession over the next couple of years, we will have to fight the OECD problem even harder than we are now.'' The Bank of Bermuda has not been immune to the `Asian Flu'. Figures released this week show that after $24 million in corporate trust fees were collected by the bank globally in the first quarter of 1997, the Hong Kong division alone was down $4.2 million for the comparative quarter this year.

The bank would not reveal, however, how much of the corporate trust business in Hong Kong, $4.2 million represented.

But president and CEO Henry Smith confirmed there were bank clients in the Far East "who have suffered a severe diminution in asset values''.

After 30 years of visiting Hong Kong on business, Mr. Trimingham, who doubles as the president of Trimingham Brothers, conceded: "Hong Kong traffic is probably down 25 percent and the word on the street is that the hotels are half empty. The whole atmosphere is one of concern and worry.

"They see massive unemployment in the region. In Indonesia, there is something like 80 million people now below the poverty line. Malaysia is in turmoil.'' Even in Singapore, he said, the economy was similarly being hit. For all the successes of the Singapore nation, they were a financial centre for, and a trading partner with, Asian countries in the region that were being seriously affected. They were worried about what the whole Far East situation would mean.

Mr. Trimingham said that more Bermudians were beginning to see how global problems affected the Island.

And he agreed with Gibbons Co. CEO and former Bank of Butterfield chairman, Sir David Gibbons, that there could be some hard economic times ahead.

Mr. Trimingham said, "There are millions and millions of people in these countries who have been buying US products in huge quantities -- quantities that have been climbing every year for virtually 30 years -- and they are now without the wherewithal to make those purchases.

"This includes the Japanese, which is also impacted, especially in that the Japanese economy is at the centre of the entire problem there.

"You cannot help but realise that this world financial crisis that we are facing is probably a different thing from the Great Depression of the 1930s.'' "We have the biggest challenge to the world since then. It's the biggest financial problem. And it will cause a significant social problem.

"When you think of so many millions of people in the region who will not be able to make normal purchases, then you can see how this will affect the sellers in both Europe and North America.

"You're talking about less profits for these western companies, less employment, more lay-offs and curtailment of expansion plans, strong recessionary pressures in both the US and Europe, which will impact on Bermuda.

"We will face a very difficult couple of years. And along with that, we have the year 2000 Y2K issue, affecting the travel, communications and international business industries.

"Those are the three that are most vital to Bermuda. Any breakdowns will really hurt us, impacting Bermuda to a greater extent than an onshore jurisdiction.'' Eldon Trimingham Henry Smith