taken a new twist with moves inside the US Government to end the concept of banking secrecy once and for all.

At a conference held in Jersey in the Channel islands, John Moscow, a senior United States attorney, told a stunned audience: "Today's bank secrecy statutes are used by criminals of all types -- they are not needed by honest folk engaged in honest transactions.'' Asked if he were speaking on behalf of the United States Government, Mr.

Moscow said: "I cannot speak on the record for other departments, but we are not doing this in a vacuum.'' Mr. Moscow is deputy chief of investigations for the New York District Attorney's office. Among his comments to the gathering in Jersey, he said: "It is apparent that the economies of the world have become a unified global economy in which some countries are better able than others to participate .. . and we need a new set of rules.'' Mr. Moscow added that "there is no place for banking and corporate secrecy laws in `the new world order' and they will have to be abolished if the rule of law is to survive.'' He then said: "The world can no longer afford legal quirks such as the Cayman Islands and the Netherlands Antilles''.

The Cayman Islands' Financial Secretary, George McCarthy immediately hit back: "Banking confidentiality is not a misnomer and in the normal course of business is a Common Law protection which supports legitimate business dealings.'' Mr. McCarthy continued: "I find it strange that Mr. Moscow should refer to the Cayman Islands' regulatory legislation as a 'legal quirk'. The fact is that the Cayman Islands comply with all international standards with regard to exchange of information in relation to criminal matters.'' Mr. Moscow has previously criticised the Channel Islands for failures to co-operate with other jurisdictions, although lately he has acknowledged a change in attitude. The authorities in the Channel Islands "have made it clear that they want to work with other people who want to fight crime,'' Mr.

Moscow said in a more conciliatory part of his speech.

Jersey has recently dropped a requirement that an alleged fraud must involve a loss of at least two million pounds before the jurisdiction would assist another country in an investigation. The changes are reminiscent of the fine tuning Bermuda has been carrying out to the Proceeds of Crime Act and US Tax Treaty as international organisations step up their scrutiny of the offshore world.

By contrast, the financial regulations in Antigua and Barbuda have undergone a much more dramatic overhaul, following receipt of US and UK advice notices to companies that all dealing with the islands should be carefully scrutinised.

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