Minister of Finance Eugene Cox last night said that Bermuda would save money by having the Bank of New York the sole custodian of the Island's public funds.

He said that the Government had a relationship with the bank going back several years and the bank had given the best tender to take on the sole custodianship of public funds.

"This is a good thing for Bermuda,'' he said. "It will be cost effective and we will have the potential for additional revenue.'' He said that there had been several custodians of Bermuda's funds over the years and that the sole custodianship had been put up for tender.

When asked if Bermuda banks had been invited to tender, he said "yes'', but Bank of New York had come up with the best proposal.

"It met all criteria, and has the greatest history of being custodian of public funds, is cost efficient and would be beneficial to our country,'' said Mr. Cox.

He said there would be savings from economy of scale and that the bank was very experienced in being the custodian of funds.

The announcement was made via a newswire service in New York yesterday, on behalf of the bank.

Shadow Finance Minister Grant Gibbons, said yesterday the Bermuda Government should have considered a local Island bank to be the custodian of public funds.

The Bank of New York has recently been under investigation from the US government over allegations that the Russian mafia laundered money through the bank.

Dr. Gibbons said last night: "The choice of Bank of New York could be an unfortunate choice because recently it has been under investigations allegations of money laundering, particularly given sensitively with regard to money laundering issues and offshore jurisdictions.

"I would say if there was the possibility of keeping the custody in Bermuda and there is a competitive bid on provider of service it should be considered.'' The release, which was issued on the Internet wire service, said: "The Bank of New York announced today that it has been appointed by the Government of Bermuda as the sole custodian of its public funds.'' Mr. Cox said: "After a thorough review of service providers, The Bank of New York has been selected as sole custodian for the Government of Bermuda's public funds.

"One of the key factors in our decision was the Bank's ability to provide the Internet-based reporting capabilities that will help us monitor our investments.'' Thomas Perna, senior executive vice president, The Bank of New York said: "We are pleased that the Government of Bermuda has the continued confidence in our ability to provide the information-based solutions that help them achieve their goals. We look forward to continuing our partnership.'' The release said the Bank of New York provided a "comprehensive array of services for investors and issuers worldwide.'' It has 29 non-US branch and representative offices in 26 countries and securities servicing in 99 markets.

It said: "The Bank of New York is the world's largest custodian bank with more than $7 trillion in global assets under custody.'' Eugene Cox