Wednesday following the effective collapse of the European Community's Exchange Rate Mechanism.

Dealers had to think on their feet in the face of extremely volatile currency markets.

"Utterly chaotic'' were the words used to describe the day's activities by the treasury heads at both the Bank of Bermuda and Bank of Butterfield.

"During my 20 years in business I've hardly seen anything of this nature,'' said Mr. Jan Birkenheim, treasury manager of the Bank of Bermuda. "We were exceptionally busy. Volume was very, very large. I've not even got our figure yet but the underlying value of transaction must have run into billions of dollars.'' The markets went mad as they reacted to the hiking of UK interest rates in two moves from 10 percent to 15 percent, before it was announced the second rise had been cancelled.

As sterling dropped, investors escaped to the US dollar and gold, considered to be safe havens in times of turmoil, and they both surged in value.

Butterfield's head of treasury Ms Stasia Dearing likened the market's volatility to the stock market crash of October, 1987.

"People were scrambling to get out of various positions and we managed to help quite a few of them do it,'' she said.

"I got a phone call from London at 6 a.m. saying that a minimum lending rate of 12 percent had been established.

"From then on, the rest of the day was hectic. Every five or ten minutes we were hearing different rates in the market. It was chaos.

"We were still trading after five o'clock on Wednesday. It was a very good day for the bank.'' Wild rumours circulating the globe through hyper-efficient telecommunications added to the market's volatility.

Traders' computer screens are linked to news and financial news agency services which flash up market-affecting headlines throughout the day.

Among the headlines on Wednesday were that both UK Prime Minister Mr. John Major and his Chancellor of the Exchequer, Mr. Norman Lamont were about to resign. Neither had happened by yesterday.

Both banks said Wednesday was a day when some of their corporate and individual clients made fortunes, and others lost them.

Mr. Birkenheim agreed that, later that evening, some people would have been crying in their beer, while others would have been drinking champagne.

"But we, in the trading department, couldn't afford to do either,'' he said.

"We had to get to bed early because the next day promised to be almost as busy.'' Both banks said they did very well out of commissions.

While Bermuda's two largest financial institution were cleaning up on the markets, one of the busiest trading days in modern history by-passed Bermuda Commercial Bank.

BCB's managing director Mr. Richard Francis said: "At the first indication of problems, we closed down our position and decided we would not try to ride the tiger.'' He said his bank "took no losses'', although he agreed that it had made no profit either on the sort of volatility that traders dream of.

"We have been taking a very conservative stance over the last few weeks,'' he said. "We're not high volume foreign currency speculators.''