Bahamian bank chief talks regional alliance By Ahmed ElAmin The Bahamas, Bermuda and the Cayman Islands should form closer ties, perhaps even establish a regional group, Governor of the Central Bank of The Bahamas Julian Francis said.

He said the Bahamas and the Cayman Islands have very few economic links with other Islands in the Caribbean. As international offshore centres the two Islands had much more in common with Bermuda he told members of The Institute of Directors at their annual dinner Saturday.

"We might align ourselves in some formal association,'' he said. "There are some synergies to be gained.'' Such an association could co-operate in the area of financial services for example. Offshore centres were under pressure from two different areas.

Onshore locations were looking at intruding on bank and trust secrecy laws to try and ferret out tax dodgers in offshore locations.

And the threat of international crime groups using offshore locations for money laundering could damage reputations.

Offshore locations were also becoming more competitive for business. This could lead to a lowering of standards, as some international businesses were engaging in type of "jurisdictional arbitrage'', attempting to find a home in the place with the least entry requirements.

The Bahamas was going to maintain its secrecy laws in the face of these pressures and step up its attempts to weed out the good from the bad.

He said the Bahamas had cleaned up its fallen reputation as a place of domicile. The island is home to 415 offshore banks, hundreds of mutual funds and other financial services companies.

"We have fully restored our reputation,'' he said.

The island has studied Bermuda as a role model, even the manner in which it is handling deregulation of the telecommunications sector.

"We are following with interest the developments in Bermuda and are learning from your experience,'' he said.

The Bahamas doesn't have the same sort of restrictions on businesses as Bermuda. There is no requirement that foreign ownership of local business is limited to 40 percent. And work permits restrictions are not so tight.

"The Bahamas feels that business must be allowed to operate,'' he said. "We don't believe in micro managing businesses. We don't restrict the hiring of qualified persons. As a result there has been growth in the number of senior Bahamian managers.'' ISLAND ASSOCIATES -- (L-R) Brian Redman, Geoffrey Moore, and Julian Francis, Governor of the Central Bank of the Bahamas, chat at the Institute of Directors annual dinner, held at the Mid Ocean Club on Saturday.

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