Harbour Resort tell the human side of the end, for now at least, of one of the great symbols of Bermuda tourism.

Stories of past guests trying to book one last night in the hotel, coupled with the descriptions of loyal staff members who will bid farewell to the place which has been their employer for decades, demonstrate the human loss caused by the closure.

There is a silver lining in this cloud: The property should re-open again, assuming Bermuda Properties Ltd.'s financing is in place and the proper management can be found.

In the meantime, this closure, coupled with the closures of the Belmont, the still possible closure of the Palmetto Bay and the string of closures of other properties in the past decade, show Bermuda is nearing a crisis point where the lack of hotel beds make any recovery almost impossible. Increasing total arrivals and visitor spending is an insurmountable challenge if the beds are not there for guests to book.

For that reason alone, the Castle Harbour project must get off the ground.

This will be hard since, as Cambridge Beaches president Michael Winfield noted last week, many hotels cannot afford to renovate. Construction costs are now so high that it is almost impossible for hotels to recoup their investments.

If that is the case, the Castle Harbour's backers run the risk of throwing good money after bad. But hoteliers, including Castle Harbour, cannot throw in the towel either. Finding ways to reduce costs is the only answer. If construction costs are high, then savings in Customs duties and materials need to be found instead.

CENTRAL BANK EDT Central bank Government's decision to give the Bermuda Monetary Authority greater powers and independence is a step in the right direction towards the Island having a true central bank.

And the decision to increase the fines and punishments for money laundering and financial crimes is also long overdue; putting teeth into the BMA's ability to fight white collar crime is a key element in the Island's ability to present itself as a respectable financial jurisdiction.

Because the BMA is responsible for the performance and security of financial institutions, it is vital that it be given the powers necessary to regulate and control banks, deposit companies and other finance companies to ensure they are meeting the needs of their depositors.

However, it is not clear if the BMA will ever have perhaps the most important weapon in a central bank's arsenal; the ability to influence interest rates.

Because Bermuda is linked to the US dollar and because so much of the currency circulating is American, it is difficult to know if the BMA could have a meaningful part to play in using interest rates to control inflation and to help the economy grow.

Historically, the seven percent ceiling on rates protected the Island from the worst of overseas rate increases while annoying investors who saw greater gains to be made overseas.

The lifting of the ceiling and exchange controls mean that interest rates are now more in line with those in the US while investors have many more options than they did a decade ago. However, the BMA does not yet have the ability to either control inflation or to encourage greater local investment. That's a shame.