New England area, which supplies Bermuda with most of its tourists, was pulling out of its devastating recession.

Mr. Richard Syron, president of the Federal Reserve Bank of Boston, was speaking at a conference being held at the Southampton Princess Hotel by the Massachusetts Bankers Association.

In the banking sector, Mr. Syron said: "There's been a very, very dramatic improvement in Massachusetts banking.

"I cannot find any other region that got into as serious a range of difficulties as we did and recovered so quickly.'' Factors which have led to this sector's recovery included the stabilisation of real estate prices, a decline in interest rates, a "very gradual'' improvement in employment and cost containment efforts, said Mr. Syron.

He told bankers: "The parts of the country which grew most rapidly during the 1980s have done the most poorly in the late 1980s and the early '90s.

"It seemed for us in New England during the 1980s that everything that could go right did. Now we are seeing the flip side of that.'' He produced figures showing the total non-agricultural employment by district of the US over the past few years.

Minnesota, Kansas City, St. Louis and Atlanta were among those areas which had survived the recession best in terms of employment, said Mr. Syron.

But regions like Boston/New England and New York -- upon which Bermuda relies heavily for its visitors -- had come out worst, way below the US average.

Mr. Syron added: "We are going to face a period of anxiety about the job situation in New England for the next several years.'' Unlike after the 1973-75 recession when there was an explosion of jobs through companies like Data General and computer firm Wang, it was harder to identify the areas where jobs will be created following the recent recession, he said.

So much restructuring of companies and economies was going on around the world, which included job losses, that it was affecting recovery, he said.

"If that was not going on we would be seeing a normal economic recovery,'' he added.

On a wider note, Mr. Syron told The Royal Gazette that he expected the US recovery from recession to be slow and steady rather than meteoric. "It's not happening as strong or as fast as I would like,'' he said. "Growth has been up and down but it's still improving and the economy's still fairly durable.

"I would expect that to continue to be the case. There will not necessarily be growth quarter to quarter but the trend will be towards gradual improvement.'' He forecast that the US economy would grow by about 2.5 percent over the next couple of years, but said that beyond that, "it would be silly to forecast''.

"A substantial drag on US growth has been the poor performance in Europe and in Japan,'' he said. "But the Japanese have just put together a major fiscal stimulus package which you would expect to have an impact soon.

"You would also expect the German situation, which has suffered a deeper recession than the US, to start to improve relatively soon.''