financial regulatory affairs of Bermuda and sister UK dependent territories being used by the world's capital as an offshore financial base, the biggest threat to the Island's financial success may be about to blind-side us.

A view has been advanced that as more countries onshore relax bureaucratic controls, the role and the need for the offshore centre is being eroded.

George Graham and Robert Wright, writing on the comment and analysis page of the Financial Times, argued: "The role of such centres as a bolt hole from high taxation and burdensome regulation is beginning to erode as countries everywhere lower tax rates and dismantle bureaucratic controls.'' An article entitled "Winds of change on treasure islands'', continues: "In market after market, the whole structure of foreign exchange controls, the whole fear of having your savings and your capital confiscated, or eroded by runaway local inflation, is decreasing,'' says Michael Giles, chairman of international private banking at Merrill Lynch, the US investment bank.

And as onshore is becoming less restrictive and more inviting, offshore jurisdictions have been beefing up money laundering legislation, making the crime not just penal for drug dealers, but for any criminal activity.

The authors say that people in Bermuda, the Channel Islands and the Cayman Islands point to their own jurisdiction as small potatoes in any potential money laundering scheme. London is targeted as a more likely place, playing host to an estimated $600 billion of non-resident money.

Guernsey's former chief financial regulator, John Roper, is quoted as saying, "The trouble is that the harder you work to become a respectable offshore centre, the more attractive you become to money launderers.''