Earlier this week, a reader wrote: "After being assured by the PLP, the UBP, Alan Thompson, The Royal Gazette, and the Bermuda Monetary Authority that depositors need not be concerned about Government's $200 million guarantee to Butterfield Bank, I'm very interested in hearing your opinion on the subject."

Disclosures: I have been in England since before the story broke, and have had no contact with anyone in Bermuda on the subject. I follow Butterfield Bank closely and have read the media coverage. I have been a satisfied customer of the bank since 1976 and had a hand in writing its history last year.

As I understand things, the bank attempted to borrow from the capital markets in the ordinary course of its business, but was unable to raise on acceptable terms the $200 million it felt was required. Accordingly, the Bermuda Government has agreed to underwrite and guarantee an issue of the bank's preference shares.

What does this tell us about the bank? Not much. Banks are always adjusting their capital to suit their circumstances and those of the markets. That Butterfield found the capital markets essentially closed is hardly news. I am certain that the bank could have had the money, if it were willing to pay a stiff rate of interest.

As a guide, consider that in the past few weeks, Maiden Holdings, a Bermuda insurer, paid 14 percent to borrow $260 million; Willis, a global broker, paid 12.875 percent to borrow $500 million; and Digicel, a communications specialist, paid 12 percent to borrow $335 million. Each had specific reasons. Butterfield may have felt that borrowing at similar rates for its ordinary business could only mean losing money. Not borrowing probably meant the same thing.

That the Bermuda Government stepped in to protect the bank can only serve to strengthen the bank's hand. Indeed, Fitch this week upgraded the bank's Support Rating to '1' from '3'. A Support Rating of '1', Fitch said, "denotes a bank for which there is an extremely high probability of external support. The potential provider of support is very highly rated in its own right and is clearly demonstrating its willingness to provide support."

A separate question relates to the Government's actions in this regard. Although I am opposed to most of what governments do, this action seems to be to be exactly what the Bermuda Government is there for. Governments of most other countries have stood behind their banks - why shouldn't the Bermuda Government?

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No doubt, I will receive e-mail from those who feel that the bank should not have been helped, if last week's mailbag is anything to go by. You may recall that I defended Bermuda against charges of being a tax haven, and said that I doubted that the G-20 would "close down" the Island. I did expect tax cheaters from other countries to be made more accountable to their governments by new regulations on banking.

One reader wrote: "Why does the rest of the world not agree with you, Roger? You are now putting your opinion up against the current President of the US! Pretty bold! Bermuda is a tax haven and to prove it you only have to look through the list of 10,000 companies that are registered in Bermuda to realise it! I suggest your naive views may well be ill-informed!"

My response: Bermuda is tax-neutral. It provides a convenient environment in which the 10,000 companies mentioned can operate with efficiency, a legal option not available in many other developed countries with bad tax laws on their books. Barack Obama, let us not forget, is a relative newcomer to the world of international finance. I doubt that he would want one of his earliest actions to be throwing the world's most successful black country and much of the Caribbean into penury for the sake of a few bucks.

In a subsequent e-mail, the same reader referred me to an article on the subject that contained this: "No one can define 'tax haven' meaningfully. (That's) right of course. No one can. Which is why we prefer the precisely defined term 'secrecy jurisdiction'." Me again: Exactly. Bermuda is not a secrecy jurisdiction.

A long e-mail on the subject came in from a US reader. Excerpts: "In last week's column, you wrote: 'The US closing Bermuda would damage its own interests'. I have no idea what such 'interests' might be. Other than lax tax laws, what does Bermuda offer the US which is not already here? That is a real question, not flippant."

He continued: "I cannot find what those interests, to the whole population of the USA, might be. A large financial interest to a greedy, very small fraction of the population; well, maybe."

To respond: Bermuda's reinsurance industry now pays about 40 percent of all US insured losses from catastrophes, plus a meaningful percentage in other lines of business. That's a fact of life for every insured American (except some in Florida, thanks to the delusional policies of Governor Crist). Bermuda has some lax tax collection systems, but no lax tax laws. We operate a different model from the one used in the US, one based on indirect taxation.

Many expatriates would pay less tax overall in their home countries than they do working in Bermuda. Direct taxation, as practised by the US and other jurisdictions, inhibits business development, saps morale and is generally counterproductive. The US tax code is the villain of this piece. Bermuda has a better mousetrap. It also therefore offers every US citizen a model of economic behaviour that has not yet required our children's future to be imperilled.

A shorter e-mail from a fellow in Hamilton said simply: "To add to your comments last week: Gordon Brown is sitting on the fastest growing tax haven in recent years, London." True enough. More money is laundered in London daily than in Bermuda every year.

The e-mail address for complaints, libellous comments, threats etc. is unchanged: crombie@northrock.bm

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Always ready to experiment, I spent last weekend with a cat and the Internet. A reader had advised us of the existence of an Internet website for cats, so I asked Charlie, my brother's cat, to sit down in front of the computer screen and watch along. He graciously complied.

Two hours of research revealed that Charlie keenly followed the antics of every other cat I showed him on the computer screen. He closely scrutinised every YouTube video of cats falling off high places and other amusing behaviour. His eyes followed the action and he seemed spellbound by the recurring images of cats.

Widening the research, I discovered that Charlie had absolutely no interest in videos of dogs, squirrels, mice, hamsters or any creature other than a cat. I urge you to carry out your own research with your pets and let me know what happens. I sense we are on the cusp of a major breakthrough in utterly useless information.