60/40 rule, it seems clear that politicians of both political stripes have been playing a dangerous game. It is clear that today the Bank of Bermuda is a highly complex international operation which competes in a tough field with much larger and unfettered banks. To make an attempt to force the bank to remain local is a grave mistake.

Bank of Bermuda President Henry Smith has been quoted as saying: "We have to assume the timing was terrible given the political situation.'' That is probably true but politics should not have been a consideration in the House of Assembly vote. Politicians are supposed to act in the best interests of Bermuda and Bermudians and in this case their votes may have been very destructive.

Bermuda's 60/40 rule was enacted long before Bermuda's banks had any concept of being anything but local bankers. The rule was intended to safeguard the then successful and lucrative retail sector from being swamped by large merchandisers from the United Kingdom and the United States seeking Bermuda's tax advantages. It also demonstrated Bermuda's independence and its ability to look after itself. That was wise and sensible.

However in recent years, Bermudian banks have been making their money from operations outside Bermuda. The local retail banking section has not been a significant factor in their success although the location of international companies in Bermuda has been. But it has to be remembered that many of these companies have been attracted here by Bermuda's stability, including stable and efficient banking operations.

Henry Smith said: "We cannot sit still. We need to position ourselves for growth.'' That is the essence of the need to remove the 60/40 rule. The 15 PLP MPs who voted against removing the rule seemed simply to be harassing the Bank of Bermuda especially, since the PLP had given the public the impression that it was in favour of removal. Opposition Leader Jennifer Smith was precluded from voting because of her directorship of the Commercial Bank, but we heard her say that she is in favour of removing the 60/40 rule from all three banks.

In the UBP, 13 MPs voted for passage and some, notably Jerome Dill, Ann Cartwright DeCouto and Quinton Edness, were precluded from voting because they too are bank directors. But a few were mysteriously missing and might have carried the passage of the bill. Where were Maxwell Burgess, C.V. (Jim) Woolridge and Irving Pearman? For that matter, where was the PLP's Dr. Ewart Brown? The always unpredictable UBP MP Trevor Moniz abstained.

Mr. Henry Smith has gone to great lengths to say that despite strong rumours to the contrary, the Bank of Bermuda will be staying in Bermuda. But he did say "We have to reconsider our options.'' The politicians should not make a mistake. The Bank of Bermuda, the Country's largest institution, will do what is best for itself and, no matter the denials, it does have the option to take corporate headquarters elsewhere and operate the local banks as branches.