Bermuda's economy has fared better than most through the financial crisis, but faces tough challenges ahead, according to Butterfield Bank chief executive officer Alan Thompson.

Commentating on a panel at the Bermuda Captive Conference, Mr. Thompson said he was "pretty confident" about the future of the Island's economy but did not expect to see a rapid recovery.

Also on the panel was Finance Minister Paula Cox, who said Bermuda had been impacted by an international downturn and the Island had to do everything possible to ensure it remained an attractive place to do business.

And Jeremy Cox, deputy chief executive officer of financial regulator the Bermuda Monetary Authority, stressed the importance to the economy of keeping pace with the ever-changing regulatory standards.

"Bermuda's economy is very integrated with the global economy and to say that we've been immune to the problems would not be true," Mr. Thompson said.

"I think we have fared better than most other places. From a banking perspective, in our loan portfolio, we've seen little change. In the US there has been a lot of concern about the housing market and residential and commercial mortgages. In Bermuda last year, we had one foreclosure."

He said the insurance and reinsurance sector formed the backbone of Bermuda's economic resilience.

Ms Cox said the world had been hit by "an economic tsunami" from which Bermuda had not been isolated.

Addressing the delegates, Ms Cox added: "I think that you are a key linchpin of our economy. Tourism is going through a lull right now and although there are a number of hotel projects in the offing, many have not yet broken ground. We appreciate there will be some delays, while developers wait to see signs of a more stable economy."

The Island had to do what it could to stay ahead in a competitive environment, Ms Cox added. One example of that was the signing earlier this month of the Island's 12th tax information exchange agreement TIEA, with the Netherlands, which allowed the Island to move up from the Organisation for Economic Cooperation and Development's (OECD) "grey list" to its "white list" — the top tier of jurisdictions ranked by implementation of tax transparency standards.

The largest challenge ahead was economic, Mr. Thompson said. "2008 was all about a financial meltdown, but now we are moving into real economy issues," the CEO said.

"Tourism seems to be doing OK, and global construction has been slowing down and that will happen here too. So far, the job market has held up pretty well and you have to hope that will continue.

"If you accept the theory that we're bottoming out, then we should be looking for signs of recovery. It's not only about insurance and reinsurance — we have to get the balance right and make sure we get the tourism and construction sectors back as well."

Ms Cox said one of her biggest challenges stemmed from events and decisions taking place outside Bermuda.

"For a politician, one of your greatest fears is of those things you have no control over," Ms Cox said. "It's a concerning and worrying time, when so much depends on policy-makers in other jurisdictions, who maybe don't understand what goes on in Bermuda."

That factor underlined the importance of the Island's UK office in London and its US trade and tourism office in Washington, DC, scheduled to be opened in late September, Ms Cox said, and why the Island had to work hard to effectively communicate how its activities have a positive impact on economies elsewhere.

Mr. Thompson agreed, saying a lot of "heated political rhetoric" aimed at the Island from elsewhere was based on untruths.

"We even heard from some French politicians that offshore financial centres were responsible for the world financial crisis and the problems with hedge funds, things that are just not accurate at all," Mr. Thompson said.

"We have to make sure that our story is well communicated."

Mr. Cox said the way that different entities worked together to ensure overseas decision-makers were armed with the facts was a major strength.

"Just as you see on this panel, industry, Government and the regulator sit side by side in promoting Bermuda and we work together to get the message across to other jurisdictions," Mr. Cox said. "That partnership is key."