When the credit crunch came in mid-2007, Bermuda appeared to be at the sharp end: it was the domicile for two Bear Stearns hedge funds whose struggle to meet margin calls signalled the start of a crisis that has convulsed US markets ever since. But the leading offshore financial jurisdiction has largely stayed out of the news since then, which is heartening for Matthew Elderfield, CEO of the Bermuda Monetary Authority (BMA). He is confident that the country’s banking sector, as well as its trusts and funds business, is in good health.
“In spite of subprime, profitability is good for the banking sector, it has been a strong year again for them, with relatively conservative balance sheets,” he tells The Banker. The risk-asset ratio of the Bermudian banking sector as a whole stands at a very strong 17.1%, while asset base growth has remained steady. “On the fund side, new registrations have been about on par with the previous year, so no obvious impact in terms of the amount of business coming to Bermuda,” adds Mr Elderfield.
