In a domineering and patronising tone, the United Kingdom Treasury has `noted' the responses of the Overseas Territories, including Bermuda, to KPMG's Review of Financial Regulation.

Melanie Johnson, Economic Secretary to the UK Treasury, said, "I have made it clear the establishment of independent regulatory authorities, of effective powers to assist investigations by overseas authorities, and of any necessary enhancements to the laws and systems which combat money laundering are essential elements in establishing properly regulated financial centres in the Overseas Territories.'' Taking no apparent account of what has already been established or is in place, she went on to say, "These overdue measures need to be in place by the end of September 2001. The Overseas Territories themselves agreed when the review was published that these three priorities should substantively be in place by then, and I expect full delivery of their promises.'' "I also expect to see KPMG's other recommendations implemented by the end of 2001. The UK fully supports a number of international initiatives which make it clear that counter-measures will be taken against persistently non-compliant offshore financial measures.'' Displaying far greater understanding of the issues involved Baroness Scotland, who has responsibility for the Overseas Territories, said, "I welcome the high level commitments from the Caribbean Overseas Territories and Bermuda to address the KPMG recommendations.'' Bermuda charts own course "Financial services is a competitive sector and the UK government is keen that the Overseas Territories will attract quality business seeking a well regulated environment, based on the prevailing rules, laws and good practice internationally.'' Bermuda's industry appears satisfied with Bermuda Government's response. David Ezekiel, speaking for the International Companies Division of the Chamber of Commerce, said, "We think the initial KPMG report and the response by Government should provide all of us in the business community and in the private sector with substantial comfort that we live in a jurisdiction which holds itself to the highest standards by way of an effective and sensible regulatory framework.

"The international sector in Bermuda has thrived in some part due to the flexibility within our regulations and this is not an advantage we should surrender lightly.'' "Our initial reaction to the Government response is that it is extremely well crafted, both in terms of content and tone. We think it did well to point out that Bermuda's legislation is generally of an extremely high standard and that we would resist any move to hold us to a higher standard than that prevailing in many of the major onshore jurisdictions.'' David Ezekiel: Bermuda's advantage not be surrendered lightly