Bermuda's economy is still suffering from an economic crisis which has so severely impacted almost every sector of industry, according to a group of top business leaders.

That was the finding from a panel discussion on the economic state of the Island at Capital G's Private Wealth Conference held at Tucker's Point Hotel & Spa yesterday.

The panel, which was moderated by financial commentator Roger Crombie, featured former Premier Sir John Swan, Capital G Bank president and CEO John Kephart, Craig Bridgewater, lead partner of audit for investments and banking at KPMG, Bermuda Stock Exchange (BSX) CEO Greg Wojciechowski, Alex DeCouto, president of Greymane Contracting and former president of the Construction Association of Bermuda, Wendell Hollis, an attorney at HCS Ltd., Peter Durhager, executive vice-president and chief administration officer at RenaissanceRe, and Penny MacIntyre of Rego Sotheby's International Realty.

The debate covered everything from the effect of the recession on the economy and re/insurance sector, the threat of the proposed Neal Bill to Bermuda, the fall-out from Butterfield Bank's writedowns on investments and subsequent recapitalisation, the ailing tourism industry, an oversupply of offices and a fall in commercial property rates, as well as an overspending Government.

Sir John gave a snapshot of the current economy, both on a perceived level and the reality of rising unemployment with more expatriates leaving the Island and more Bermudians on the streets, which in turn led to the social crisis that the country faces today, reflected in the recent spate of shootings and violence which had erupted over the past year.

"I try to look at the cause and effect," he said. "We have got to try and work through this thing. We have been through the same thing in 1990 when we had to wind down the economy very fast and send a lot of people home.

"I don't think we have acknowledged that problem fully and if you don't do that and articulate that to the public, as I believe Government hasn't done a good job of doing so, then people will take matters into their own hands."

Sir John admitted that the significant number of civil servants on Government's payroll was an issue, but raised the point that if they were not, a lot more people would be out of work with a higher degree of social instability than at the moment as they struggled to cope with the cost of living, paying their mortgages and affording to send their children to school.

"I think we have to start looking at how can we get the Bermuda economy kicked back on again and create jobs and start building again," he said.

"It is easy to dwell on the negative and what has happened in the past, but I think we need to look forward and drive on now."

Turning to the re/insurance industry, Mr. Durhager said that the sector had undergone a serious test of its resolve over the past couple of years, but the Bermuda model had proved its strength and resilience in the face of the global recession, while deflecting interest from the perceived threat of US tax legislation and the nationalisation of US catastrophe programmes and highlighting the importance of the services and security the Island has to offer instead.

He said that while many companies did not realise the full extent of the risk they were carrying throughout the crisis, Bermuda-based entities had by and large weathered the storm well, as re/insurers considered their operating costs and maintaining capacity during a soft market at the same time as waiting for the next big event to occur.

Mr. Wojciechowski then summarised the knock-on effect of Butterfield Bank writing off a number of toxic assets from its books and subsequent recapitalisation on the bank's share price and thus on the BSX's Index, which dropped to historical lows as a result.

But he said now was the opportunity to reset and for the new management team to restore confidence and really drive the bank forward in the future.

"On balance, all things considered, I think as things move along and management does the right things then only time will tell," he said.

"It is a far better situation than it was a year ago."

In terms of tourism, Mr. Hollis, chairman of the Government task force on gaming, said a shortage of capital was the main problem facing the industry, citing the example of about 40 properties in the Caribbean basin on which work had started but had to stop due to a lack of funding, adding that Government needed to come up with an innovative solution, whether it be gaming or another option.

He said that as a result of high labour costs and property values for building hotels and accommodation, the Island's tourism sector was no longer economically viable after being overtaken by the main pillar of the economy by international business.

"Bermuda's success in international business has been the kiss of death to sour hospitality industry," he said.

Touching on the construction industry, Mr. DeCouto said that the fact that a total of $3.2 billion had been poured into proj-ects over the past ten years, including two to three million square feet of office space and three thousand houses, proved there was an oversupply for the demand available in an ever softening economy, but added that now developers would now be seeking to reap the rewards of their investments as the new buildings started to fill up.

Ms MacIntyre said that the commercial side of the real estate market had experienced a definite downward pressure in terms of rental prices over the past 18 months as companies looked to reduce overheads, with many of them choosing to upgrade and find better rents, while the biggest demand for residential properties was at the higher end of the market.