The PLP government has done a tremendous job steering Bermuda's economic ship through turbulent international waters. But, given that the American economy is, according to today's Wall Street Journal, facing the worst crisis since the Great Depression, there's no doubt that tough times are ahead for both our tourism and international business sectors. Finance Minister Paula Cox in The Royal Gazette:

Minister Cox said there are "clear signals" local employment will be impacted. "While it is far too early to determine with any certainty what precise impact the current financial events unfolding in the US will have on Bermuda, there are clear signals that the changes will have some potential employment repercussions in Bermuda and perhaps implications for financing of some private sector projects," she said.

"I have indicated already that the growth prospects for our economy through the balance of 2008 are lower as a result of the continuing fallout of the sub-prime debacle.

"In the face of the most recent events involving Lehman Brothers and American International Group (AIG), that outlook may very well characterise 2009 as well.

"In relation to the most recent events, my technical officers in the Ministry of Finance have been in touch with all relevant authorities, including the Bermuda Monetary Authority (BMA) and the Ministry of Tourism and Transport. Lehman Brothers had important financial relationships with private sector entities in Bermuda..."

Ms Cox added: "Likewise, AIG has an important footprint in Bermuda as it does in some 130 other countries around the world.

"That is why it is not surprising that the US Government has intervened in the manner that it has. Global financial stability is clearly at stake.

"The Ministry of Finance will continue to update the public on the basis of confirmed information in the wake of any further significant developments."

The fallout from the AIG buyout and the Lehman collapse are sending shockwaves through the international economic system. While the economic storm is getting worse, Minister Cox and the PLP government are working in close collaboration with Bermuda's business community to help Bermuda escape the storm with minimal damage.

The Royal Gazette continues:

We need to create more legs to the economic stool, but that is easier said than done. We have become so dependent on international business and what happens with it.

While the AIG crisis and others pose challenges, Bermuda's internal financial institutions are in good position to deal with these, said Bradley Kading, president of the Association of Bermuda Insurers and Reinsurers.

"The rapid demise of AIG is a challenge for its employees, shareholders and customers," he said yesterday. "The US government's bailout appears to provide breathing space for an orderly transition.

"The AIG insurance subsidiaries are well capitalised and well regulated here and elsewhere.

"The ongoing work of the Bermuda Monetary Authority (BMA) puts Bermuda in a good position to work with its international regulatory colleagues to deal appropriately with matters involving insurance groups with various regulatory domiciles."

The ABIR is right. We are well prepared to deal with these challenges. While bad international economic news is certainly impacting Bermuda, we are doing everything we can to minimize the damage.