The chief investment strategist for the second largest privately-owned securities firm in the US warned that a stock market crash, similar to the one that occured in 1987, would have more far-reaching repercussions.

More Americans have a higher proportion of their net worth tied up in the stock market than ten years ago.

Said senior partner of Oppenheimer & Co. Inc. Michael Metz: "In 1987 you had a crash and maybe a few hundred thousand affluent people were hurt. But the rest of the population had eight percent CDs and treasuries and so forth. It didn't mean a thing to them.

"But 1996 is a different story. If you have a significant decline in the stock market, it would have a significant impact on the wealth of the US population.'' Metz described money as "very peripatetic because it can go anywhere''. More people are adopting free market ideas, and people are more sophisticated about what to do with their money.

More people are choosing intermediaries to go into markets, using mutual funds and money managers, rather than going in directly.

He noted: "This all adds up to very volatile fast moving sums of money, a lot of it very leveraged.

"Tax havens buy $30 billion or $40 billion dollars worth of treasuries in a month. That's not cash paid, but maybe ten, twenty or thirty to one leveraged.

"So you have an enormous amount of speculative funds, sloshing around in these world markets, which frankly makes me nervous, because you've got too much money chasing very often unlimited numbers of things. That's why you get some extremely volatile movements in commodities and stocks.

"To me it is an area of potential vulnerability, particularly if people get disenchanted. But I think that we are in a new era where money is deregulated.

It moves faster and is more responsive to individuual developments.

"People forget that in the US savings haven't really risen. People want to own stocks, not real estate, not gold, but stocks. Just as the switch in asset preference has gone to stocks, it can always change again, creating a problem for the markets.

He also questioned the wisdom of the grand design for the Bermuda Stock Exchange.

"It reminds me of the cliche about reinventing the wheel. You have dozens of other jurisdictions that offer the same service which already have the infrastructure in place. You've got other tax havens that offer the same things as Bermuda in a sense, although few rival this island's beauty, serenity, orderliness and infrastructure.

"But to me, I don't think there is a need or a place for it. I can't see how it fulfills an economic need. I'm not sure that I know where the competitive advantage is.''