Banks in Bermuda are refusing to hit the panic button despite the big fall in global stock markets at the end of last week.

Billions of dollars were wiped off share values with the Dow Jones share index dropping by 60.89 points or 0.5 percent to 13,209.79 and the FTSE 100 share index experiencing its worst day in more than four years, losing 3.7 percent of its value. The Paris Cac index and Germany's main Dax followed suit, collapsing by 3.1 percent and 1.4 percent, while in Hong Kong the Hang Seng index ended the day down 2.88 percent at 21,799.96.

But Wayne Chapman, head of HSBC private bank, who also works for the Bank of Bermuda, moved to reassure customers that their funds were in safe hands despite the stock market fall out.

"At a time where there is volatility in the market you have to stay in touch with your clients," he said. "So, yes, it is a concern (about the stock market fall) and it is disconcerting, but it is not a new phenomonen.

"We have had a major run up in the market since 2003 and our concern is opposed to a market collapsing."

And he reckons they need to be able to diversify in order to allow for any falls in the market.

"You need to have well diversified portfolios - for example, if one segment of the equity market drops you could maybe get out of that market and take some profits and maybe move into the treasury market," he said.

"And you need a rigid portfolio team so you are not just betting on one or two horses."

Above all, Mr. Chapman believes the most important thing is to keep their clients up to date with the situation.

"What is key when markets do fall out your priority is to maintain contact with your client base, so you are on the phone telling them what is happening," he said.

"This not short term investment gains, this is long term investment that we tie clients up to."

He does not believe the stock market collapse will have a significant effect on the Bank of Bermuda specifically.

"It will have minimal impact," he said.

"The idea is to talk to clients and reaffirm our long term strategy.

"As a result of the drop there is no great impact."

Analysts predict the crisis could make it harder for banks and financial institutions to borrow or get money, a view not concurred with by Mr. Chapman.

"I don't see that as being any harder next week as last week," he said.

"We are an important part of the community and we will continue to make funds available because we have a balance sheet that we can lend out to clients and loans will go through subject to meeting the criteria in terms of risk and ability to repay."

One area of contention in recent weeks has been fears raised over the financial institutions' exposure to bad credit in the US sub-prime market, but Mr. Chapman does not reckon that will have an effect on either Bermuda or the Bank of Bermuda.

"We don't expect the sub-prime mortgage market to impact Bermuda or the Bank of Bermuda," he said.

"In the US there will be higher borrowing costs that will impact some of the mergers and acquisitions."

As a result of these problems with bad credit in the sub-prime mortgage market, a number of banks have started charging more for the money they lend in a bid to limit their risks, but that is not the case with the Bank of Bermuda, as Mr. Chapman explained.

"We are very keen to grow our market share here in Bermuda and we have gone out of our way to do that over the last three or four years and we will continue to do that," he said.

"We are looking to grow our mortgage book and we are very much open for business.

"I think there would be some sub-prime mortgage companies who were just solely in that business are suffering at the moment, so there will be some fall out of that.

"But there are positives when the equity market drops and the bond market rallies, for example."

Central banks worldwide have moved to prop up markets by lending money to troubled banks, with the European Central Bank and numerous others injecting 61.05 euros into the eurozone money market for a second day running on Friday and Japan's central bank earlier pumping one trillion yen ($8.5 bn) into the financial system to boost liquidity.

The Reserve Bank of Australia added more than twice the usual amount of money into the banking system, injecting AUS$4.95 bn in its regular morning money market operation, while central baniks in Malaysia, Indonesia and the Phillipines intervened to support their currencies and South Korea vowed to get involved if necessary to counter the international turmoil.

Elsewhere, the US Federal Reserve also scrambled to avert a liquidity crunch, promising to provide whatever funding was needed to ensure that the banks were able to continue lending to each other at normal rates as it abandoned its 'business as usual' stance to ensure the dollar money markets continued to function.

It pumped $38bn into the financial system on Friday via its money market operations and promised privately whatever additional funding was needed, while also starting to accept high-quality mortgage-backed securities as collateral for the entire amount of these funds - something it rarely considers acceptable.