The following is the text of the address delivered by Governor Sir John Vereker (pictured)<\p>at the XL Congress held by Bermuda’s XL Capital Ltd. at the Convention & Exhibition Centre in Boston, Massachusetts

An Island Without Borders: A Mid-Atlantic Perspective<$> I AM delighted to have been asked to contribute to this exploration of the concept of One World Without Borders. The mid-Atlantic is a pretty good place from which to put that world into perspective. But I ought to start by helping you put us into perspective. I govern an extremely small part of that world — roughly four hundred thousandths of one per cent of its land area — and it is of course also an island. We do, however, have an economy larger than some 40 Independent members of the United Nations. The theme of this conference is just as relevant to us as it is to anyone else.

Throughout literature and poetry, islands have been symbols of separation and of isolation, whose remoteness guaranteed indifference to the rest of the world, for better or worse. Shakespeare depicted Bermuda as ruled by magicians and spirits, not to mention a monster called Caliban.

Our early Governors made a reasonable living through piracy. Ships hoping to trade with the island’s small population not infrequently returned empty handed, having been unable to find it at all. Our first real tourist industry was based on the arrival of occasional flying boats.

But modern communications transcend geography.

Today’s Bermuda is far from indifferent to the outside world. We are home to 64,000 people and a well-functioning democracy. We have a dozen scheduled flights a day to the East Coast of the United States.

We are at the centre of a network of undersea cables that carry broadband across the globe. We are the jurisdiction of choice of some of the world’s most successful international businesses, including the one that has convened this Conference. As we move towards a single borderless world, we too are becoming an island without borders.

This borderless world increases risk. People moving freely across boundaries mean more flexible labour markets; but they also mean greater freedom for organised crime and for acts of terrorism. The free movement of capital means more efficient capital markets, but it also means greater potential for systemic instability.

A more efficient global economy is lifting hundreds of millions out of poverty, but at the price of significant climate change. The world is responding to these increased risks in different dimensions, and some responses are more effective than others. International co-operation among law enforcement and intelligence agencies has intensified. Heightened security lowers risk in some areas, albeit with the probable effect of increasing it in others.

The financial stability of both individual institutions and whole industries is under scrutiny as never before. Climate change has the potential to disrupt global prosperity; we still need an effective international mechanism to tackle its causes. Global public goods require global solutions.

A world without borders cannot be a world without rules. And if the game has rules, it must also have effective referees. Sticking to the rules isn’t something to be left to governments in the large nation states that are leading us into the 21st century. Small offshore jurisdictions have to respond to these increased risks too.

And where, as in the case of Bermuda, they are host to some of the world’s most significant risk managers, their corporate response can also be of global significance. I especially applaud the initiative of XL’s CEO, Brian O’Hara, in calling for a more co-ordinated approach by the financial services industry to corporate social responsibility. That is good business sense, because it will underpin the reputation of the industry. It is also right for a wider community whose lives are directly touched by the stability of the world’s increasingly closely integrated financial systems.

Just as we want you to be the kind of business we want in Bermuda, so you want us to remain the kind of place where you would want to do business. You can be confident about that.

Our Proceeds of Crime Act, and related regulations, will be kept up to date to ensure we adhere to international emerging best practice in Anti-Money Laundering measures, benchmarked against the recommendations and methodology of the Financial Action Task Force. Our Financial Investigations Unit is being strengthened to ensure it is fully able to play its part in following up suspicious transactions.

The Bermuda Monetary Authority is implementing all the recommendations of last year’s Offshore Financial Centre Assessment from the International Monetary Fund.

We are looking forward to hosting the Plenary meeting of the Egmont Group, which brings together all the anti-money laundering practitioners, in May next year. We expect the group to be formalised at that meeting under what will we hope come to be called the Bermuda Charter.

Rules take us only part of the way. Anyone who has run a financial enterprise will tell you that the other part, in some ways the most important part, is the creation of a climate of probity, the assumption throughout the organisation that individuals will behave ethically.

Whether in the public services or private business, establishing and maintaining that climate is a fundamental duty of leadership. In Bermuda both our public and our private sectors are committed to maintaining an environment that is attractive to responsibly managed business.

Are we vulnerable? Sure we are. Being an island in a rapidly warming Atlantic Ocean exposes us to the special risk of hurricanes.The<$> last time XL persuaded me to address this group, three years ago in Montreux, the conference coincided with the worst storm to hit Bermuda in a hundred years. I’m glad it looks a little calmer this time round. And there are other risks. Being physically remote from the competition can lead to loss of competitiveness. Being small means being highly vulnerable to discriminatory action on the part of competing authorities. So we are not complacent. But we did cope pretty well with the hurricane three years ago, and we hardly lost a heartbeat when Hurricane Florence arrived last month.

And we threaten no one. Who would want to discriminate against a stable, market friendly democracy on the doorstep of the United States?

In a single world without borders, commercial competition will remain fierce. But there will be a strong mutual interest in collaboration to reduce risk and to establish rules.

In an island without borders we have an equally strong interest in working together to maintain an environment in which business can flourish.

Remember Treasure Island? Let me remind you. Jim Hawkins had an idea about how to find the treasure: what today we would call a business proposition. Together with some colleagues he formulated a plan: what today we might call a strategy. And he raised some funds, so there were shareholders, of a sort.

Unfortunately, the competition — that rascal Long John Silver — wasn’t playing by the same rules. In the absence of commonly accepted, and enforced, norms of behaviour, they all quarrelled, Jim Hawkins went home empty-handed, Long John Silver made off with the treasure, and shareholders were left with nothing.

Well, Bermuda is prosperous but it’s not Treasure Island. In a Bermuda without Borders, you can safely come and search for your fortune

An island without borders