UK Chancellor of the Exchequer Alistair Darling has asked financial services expert Michael Foot to head the UK review of Bermuda and other UK territories that are financial centres.

The review was announced last week by Mr. Darling, who said the the global financial crisis had necessitated the move.

The investigation will focus on regulation, taxation in relation to financial stability, financial crisis management and international co-operation.

Mr. Foot's team will first look at with the Crown Dependencies — Jersey, Guernsey and the Isle of Man — before moving onto Overseas Territories, such as Bermuda, the Cayman Islands and the British Virgin Islands.

And the team will have no time to waste, as interim conclusions are expected in time for the UK Budget 2009, expected to be announced next March.

Mr. Foot appears well qualified for the job, with some four decades of experience in banking and regulation. The chairman of the UK office of global financial consultants Promontory Financial Group, Mr. Foot's previous role was at the Central Bank of The Bahamas, where he was inspector of banks and trust companies, the country's chief banking regulator, from 2004 to 2007.

He can also boast a 29-year career at the Bank of England and a six-year stint as managing director of UK regulator the Financial Services Authority from 1998 to 2004.

Mr. Darling indicated that the main reason for the review was to focus on the regulation of the offshore banking sector, since the UK does not want to be on the hook for the kind of massive bank failures that have been seen elsewhere, such as the crisis in Iceland.

"At times of stress, depositors need to know who will compensate them," Mr. Darling said last week. "The British taxpayer cannot be expected to be the guarantor of last resort. So I have asked for a review of these regulatory arrangements, which will report to me in the spring."

Finance Minister Paula Cox said last week she was confident that Bermuda's reputation would not be harmed by the review and added that the International Monetary Fund, in its recent scrutiny of the Island, found regulation to be "largely compliant with international standards".

"In the wake of the recent G 20 meeting concerning the troubled global economic and financial system it is understandable that the UK would want to better understand the role of its Crown Dependencies and Overseas Territories in the global financial system," Ms Cox said. "Bermuda is a well regulated, co-operative and transparent jurisdiction."

News of the review sparked a verbal assault on Britain by Premier Ewart Brown, who said in Parliament last week that the UK review was "an affront to every Bermudian" and that it strengthened the case for independence.