The House of Assembly on Friday passed regulations giving the Bermuda Monetary Authority new powers -- but MPs disagreed on how sweeping the changes were.

Finance Minister Eugene Cox said: "This is the first time there has been major overhaul of regulations for the BMA since its beginning in 1969.'' Among the new powers given to the BMA in the Bermuda Monetary Authority Amendment Act 1999 were: The right to increase fines on institutions, which pass false information, from $25,000 to $50,000 and or six months in prison; Raising the fine for counterfeiting from $1,500 to $25,000 with the possible prison sentence hiked up from three months to two years, if conviction is on indictment; Allowing the BMA to organise committees without consulting the Finance Minister; and Removing the requirement imposed on it to keep a reserve of local assets.

But Shadow Finance Minister Grant Gibbons was not as impressed with the proposed changes as Mr. Cox.

He said: "I'm surprised he considers it to be a major overhaul. While it does increase some fines for counterfeiting and make some other minor amendments, I'm surprised more advantage wasn't taken of the opportunity to make some far reaching changes.

"It is not enough to say that we're adhering to the '97 Basle Principles affecting external assessment,'' Dr. Gibbons added.

"This means banking supervisors organising external assessments that will require or allow outside inspectors to come to Bermuda and do complicated assessments of whether we are in compliance with Basle principles.

"That is why it is important to get a clear sense from the Government of where we are in all this process. Does this legislation bring us into compliance or is it the first step, and if not, why aren't we doing them together? "It is important, with scrutiny from the United Nations, the European Union, the Organisation for Economic Co-Operation and Development as well as Britain's White Paper and we need a very clear sense of where we stand.'' Dr. Gibbons noted that the White Paper principles stated that supervisory bodies should be free from political interference and should have ring-fenced resources. Supervisors would be looking at this when they come to Bermuda.

He asked whether Government felt the amendments to the status of the Bermuda Monetary Authority ensured funding was ring-fenced and that it was sufficiently free from political influence.

And he asked whether the changes dealt with the need to exchange information with other regulatory authorities. The White Paper meant Bermuda already had some gateway with other Caribbean overseas territories.

Dr. Gibbons also noted that with the increasing independence of the BMA, there had to also be an increase in accountability.

"There was a promise of a paper from the BMA that would set out the accountability and responsibility that comes with increasing independence,'' he said.

He recalled that when he was Finance Minister he would receive calls from institutions saying the BMA had not communicated well with them, or lawyers saying they did not get adequate information about why proposals were turned down.

Dr. Gibbons said it was important to know if the BMA had the proper staffing levels, expertise and resources to carry out its functions.

Opposition Whip Cole Simons asked if the BMA was becoming more independent and whether Government would consider having Opposition representatives on a joint selection committee to appoint BMA members.

Mr. Cox said many of the questions Dr. Gibbons had asked related to the Banks and Deposits Act which was debated before the summer recess.

He said the Act had made it clear that the BMA was still responsible for vetting and licensing banks, but they would still be cognisant of political, policy decisions taken by Government.

Mr. Cox said the amendments did go far enough in addressing the concerns raised by Dr. Gibbons.

But he added: "Have we done all that we need to do? No. But now we've defined and described certain conditions that the banks have to work by and that is being overseen by the BMA.'' During the committee stage examination of the bill, Dr. Gibbons noted that the BMA was not a lender of last resort which could bail out banks which were in distress.

Mr. Cox said the whole issue of lender of last resort was something that Government was "still wrestling with''.