The Bermuda Monetary Authority (BMA) reported growth and increased revenue in 2007 and noted that Bermuda had had little fall-out from the US sub-prime crisis.

In its annual report the BMA stated that the number of business incorporated on the Island had increased, as had the size of the BMA and steps had been taken to increase its regulatory framework such as the anti-money laundering legislation.

The report also outlined the BMA's view on how the sub-prime crisis was impacting Bermuda based companies.

CEO Matthew Elderfield said: "The authority performed a comprehensive market survey to assess the impact of the sub-prime mortgages and related structured products on the banking sector during August 2007.

"A number of banks were found to have limited exposure to these instruments; however, the vast majority of assets continue to be highly rated.

"The authority also conducted two surveys of the exposure of approximately 120 Bermuda insurance companies to sub-prime and structured products through their underwriting activities and investment portfolios. Based on the data from those surveys, the Authority conducted stress tests on firms' solvency and liquidity positions to identify outlier firms for enhanced supervisory monitoring.

"These surveys showed that the Bermuda insurance market as a whole had limited investment portfolio exposure.

"We continued to monitor closely the exposure of financial guarantee companies as well as D&O (directors and officers) and E&O (errors and omissions) exposures, through the end of 2007 and into 2008."

The BMA's Policy, Research & Risk Assessment Department have continued to monitoring the issues that have arisen out of the sub-prime crisis. They completed an additional survey in November.

The report stated: "Results indicated that for Bermuda's property and casualty market, investment in sub-prime securities appeared to be minimal."

It noted that some companies had indicated exposure in D&O and E&O and other had seen a downgrade in their ratings by international agencies.

And chairman of the BMA Alan Richardson said: "Looking ahead there is no doubt that the Authority will be operating in a regulatory and market environment that will continue to be challenging and dynamic.

BMA: the facts at a glance

The BMA's total revenue in 2007 rose $6.49 million in 2007 to $28.97 million

• Domestic trading volumes increased from 3.9 million on the Bermuda Stock Exchange in 2006 to 5.2 million shares in 2007.

• 71 new (re)insurers were established in Bermuda in 2007

• 95 new investment funds were classified during 2007

• Total assets in Bermuda banks rose five percent

• Cup Match weekend saw $124 million in circulation in 2007, up 3.4 percent compared to 2006