The chairman of the Bermuda Monetary Authority has taken a defiant stance against international organisations which, she claims, try to exert pressure on how the Island does business.

Addressing the Hamilton Rotary Club yesterday BMA chairman Cheryl-Ann Lister said that Bermuda would not slavishly follow recommendations of various international bodies on how the Island's financial services sector should be regulated.

" While it often seems that Bermuda's response has to be entirely driven by the various international pressures confronting us, the reality is that we continue to set our own agenda,'' she said.

"We will introduce those improvements that we know make sense from the point of view of our need to preserve the quality of our jurisdiction and commitment to international standards, while ensuring that we maintain the conditions necessary for our financial markets to develop and thrive.'' Mrs. Lister described the work of the BMA and explained that much of the authority's time and attention over the past year or so had been engaged in meetings of international supervisory and other bodies.

" Increasingly a number of the large onshore countries have been pressing other jurisdictions to introduce and apply higher standards to prevent their financial centres from being abused,'' she said.

" As a result we have had to spend a great deal of time defending Bermuda's position, emphasising our commitment to ensuring that Bermuda remains in the top rank of offshore centres with a robust determination to meet international regulatory standards. Those efforts have paid off and we have been largely successful in getting our message over.'' She said that Bermuda received good marks from the Caribbean Financial Action Task Force, a `pass' from the OECD and was placed in group two of three by the Financial Stability Forum. The Island was not placed on the FATF's list of problem countries and the KPMG report was generally very positive about the quality of Bermuda's international business and about the strength of its commitment to international regulatory standards.

Some detailed recommendations in the KPMG report were of a minor technical nature, while others raised much wider issues for the Island.

"As a result Government has had to consider carefully how we should respond,'' Mrs. Lister said.

"Detailed consultation has been held with the market about various proposals and Government then prepared a formal initial response setting out its intentions. This response is to be published shortly.

" The BMA had no difficulty with a great many of the recommendations pertaining to amendments to our different regulatory statutes. We were in many cases in a position to indicate to KPMG from the outset various weaknesses that we were already hard at work addressing, as part of a continuing programme of updating the legislation.'' Such instances include the Trust Companies Act 1991, the Investment Business Act 1998 and the BMA (Collective Investment Scheme Classification) Regulations 1994. Mrs. Lister explained that the Banks and Deposit Companies Act 1999, which came into force on January 1, 2000, is being used as a model for other financial legislation and relevant powers from this act will be drafted into the other pieces of legislation.

She explained how the BMA's role has changed since its inception in 1969, over the last decade moving away from exchange control towards regulation.

"The last two years have been particularly critical in that process of development as we have moved to take on directly the licensing function for financial institutions which was previously the prerogative of the minister,'' she said.

"We take this responsibility very seriously. Only organisations with adequate capital and systems, sound ownership, and management comprising fit and proper persons are eligible for consideration. The administration of this licensing regime calls for both firmness and fairness and it is vital that the authority demonstrates these qualities in its dealings with applicants.'' For many years the BMA has acted as agent for the Minister of Finance in vetting applications to establish companies and partnerships. Background checks are done on those proposing to become beneficial owners of Bermuda companies, which sometimes involves liaison with police or fellow regulators in other jurisdictions. "By these means we strive to ensure that undesirables do not use Bermuda. This is an onerous task and not always an easy one, requiring fine judgements. But it is something that has served Bermuda extremely well over the years by protecting and promoting our reputation as a very clean jurisdiction,'' she said.

Mrs. Lister praised the staff of the BMA, who currently number 40.

"Given our range of functions and the increase in responsibilities this is not a large number and I am constantly impressed by the enormous effort and dedication of our staff, as well as their flexibility which has enabled us to engineer the massive transformation in the nature of our role which has taken place in the last decade, with a minimum of disruption.'' She concluded by saying, "Clearly the role of the authority is not always an easy one. However, the relationship between Government, the financial community and the authority works extremely well and is an important element in Bermuda's success. The authority is proud of the part it plays in Bermuda's success and is committed to seeing Bermuda continuing to flourish.'' Defiant: Cheryl-Ann Lister speaking at the Hamilton Rotaray Club yesterday.