Trade Agreement.

He sees Bermuda well-placed in the world economy, noting that inflation is "out of the system'' in developed economies and not likely to return within the next two or three years.

Ensconced in his new office as President and CEO of the Bank of Bermuda, a promotion that he said caught him completely by surprise, the Englishman suggested that Bermuda's stable and well organised business climate would be a natural complement for the developing economy in NAFTA.

He also believed that it might not be long before NAFTA becomes AFTA, with Mexico, the United States and Canada realising the importance of bringing Latin American countries into their trade pact.

Such as move could mean even more business opportunities for Bermuda and the bank.

"NAFTA is going to be good for Bermuda. It will become a strong force,'' said Mr. Vaughan-Johnson. "Clearly though, there are emerging new markets in Latin America.

"What is looking very interesting is the southern hemisphere, as the developed economies of the northern hemisphere are generally slowing down.

"You have great potential in the Far East, South America, Southern Africa and Australia.'' He still sees the bank in an evolutionary stage, saying that he can recall coming to Bermuda on business many years ago when the it was "just an island bank with a few international representatives''. Back then, he would visit on business to meet with the man he replaced, former Bank CEO Mr. Donald Lines, and Mr. Vail Zuill.

He admits to having discovered some changes when he arrived six years ago to live on the Island.

"I found a level of sophistication much higher than I had previously realised. Bermuda is unique. There is no other place this size with this much sophistication. The range of professionals, the banks, the telecommunications, the standard of education, satellite transmission, even the quality of life here.

"One can always do more. It's a bottomless pit. You should never stop education.

"But considering its size, Bermuda has achieved remarkable standards for itself.

"You think, Bahamas has about $1.2 billion in public debt. Bermuda has about $100 million in public debt. And the gross domestic product of $1.7 billion for Bermuda is surprising.

"When I tell people about Bermuda they are surprised too, that you produce that much from invisible earnings.

"I never realised the thought that must go into running a place like Bermuda.

And the people are not just warm and friendly, but thoughtful and caring. So many people are involved in helping someone in the community.'' Turning to the bank's business, he did see his promotion heralding any great change.

"There will be an expansion of what we are currently doing. But I don't see any real changes in direction.

"We know where our niche is, and that is a great skill these days. We are not an overly large bank and that is an advantage. Small is beautiful in this new world.'' He admits, however, to feeling some pressure. He said he never dreamed that he would be in such a position when he arrived six years ago.

Now aged 60, he says the onus is on him to succeed within the next five years.

"Of course there is some pressure. We are always looking at new ways to develop the reach of the bank. I would be surprised if we didn't face new opportunities during my tenure.

"I see my first and foremost task as identifying a Bermudian as my successor.

I must also keep shareholders happy with improved performance and satisfy customers with improved service.

"This is an interesting challenge to have a five-year horizon to determine what you can do.'' What Mr. Vaughan-Johnson knows is that he won't get another chance in this job -- not because he is an Englishman on a five-year work permit, but because the Bank of Bermuda forces retirement at age 65.

"I was very surprised by my appointment. To think a Bermudian board of a 105 year-old bank, owned 80 percent by Bermudians, would hire a non-Bermudian. It was a great surprise.

"I think, though, that it is a sign of the times. This is a very international bank.'' It is in the top 20 of global custodians of securities and the biggest provider of institutional trust services in the Far East, since the acquisition last year of the institutional trust business of Standard Chartered Equitor Group in Hong Kong and Singapore.

The bank will also be faced with the task this year of moving 325 staff from seven non-bank offices around Bermuda, vacating 27,500 square feet of office space at the end of the year. The institution will take up residency in its new $40-million administration building on Bermudiana Road.

But even then, much like what happened to its Front Street building, the bank will have grown so much in post recession recovery that it will already be too small.

"We've already outgrown the new building,'' said the new president.

"The number of people on staff diminished during the recession. We trimmed down about eight percent. But we are now very active in a number of areas, including mutual funds and we are expanding again. We are already back up beyond where we were before the recession.'' The Bank of Bermuda, he says, is happy with progress on the new, high-tech building, but it will still need to occupy space in two non-bank buildings.

The new building will also house the bank's International Banking School, on which it spends $1.1 million annually. Mr. Vaughan-Johnson notes that there are other costs associated with the school that include the lost time by staff who are participating.

The bank has abandoned plans for a $5-million centre specifically for the school. But the educational opportunities will be expanded. Participants will be able to engage in management development courses, bank-wide customer service courses, a new employees' orientation course and a new officers' orientation course.

Mr. Vaughan-Johnson said: "We want to do more in the way of training and fine tune the current programme.'' Mr. Charles Vaughan-Johnson.