Too tight regulation risks stifling economic recovery, a panel of international experts said yesterday.

But the Bermuda Monetary Authority won praise from panellists, which included keynote speaker Dame Amelia Fawcett, a hedge fund chief, a US Treasury Department official, and senior member of the EU’s European Securities and Markets Authority (ESMA).

Tim Selby, president and director of the New York Hedge Fund Roundtable, said: “One of the things that Bermuda has done better than most is embracing the marketplace and trying to find out how they can be a better and more efficient regulator.”

Mr Selby admitted there were “bad actors” in the financial sector — but that an international crackdown on the world of finance and more regulation may not “cure the ills that were there in the marketplace” that led to the global recession.

William Murden, counsellor to the Assistant Secretary of the US Department of the Treasury, said the financial crisis that took hold was the biggest since the Great Depression and that trillions of dollars has been lost in the US alone, while unemployment had gone up to ten percent.

He said: “I am confident Bermuda understands this ... Bermuda is on the right track and the Bermuda Monetary Authority has an excellent reputation.”

And he added that the Island and its financial regulator were “promoting a race to the top, not a race to the bottom.”

Dame Amelia Fawcett, the chairman of the London-based Hedge Funds Standards Board and a non-executive member of the UK Treasury Board, added: “From a Bermuda perspective.....the fragmentation of markets and fragmentation of capital flows creates an opportunity for places like Bermuda.”

She added that — although there were threats — Bermuda could benefit as a place to do business as international regulations grew ever more complex.

Mr Selby added: “We have so much regulation coming from all jurisdictions — regulation is not necessarily bad, but there has to be some reason to it.”

Gareth Murphy, Ireland-based chairman of the investment management standing committee of the ESMA, said that there needed to more harmonisation on regulation — but that at the moment there were “a number of regimes competing with each other”.

And he called for a global drive to organise financial regulation because the financial services industry “needs simplicity and it needs certainty”.

Mr Murphy said: “Until we have that way forward, we will have this hotch-potch framework of regulatory regimes”.

And Mr Selby said: “I’m really worried about how business is going to thrive and survive in this market. We need to remember there were relatively few bad actors, but globally, regulation is impacting everyone.”