Finance Minister William Allen said this week that it would be a "supreme act of naiveté" for the Bahamas to kick dust in the face of the G-7 nations and expect their financial institutions to continue conducting business in the jurisdiction. He told colleagues that no self-respecting country should take a stand against increased supervision and regulation of its financial services sector.

Mr Allen said: 'There will be a place to take a stand, but this is not it...You will lack credibility and you will not be a respected part of that international financial sector.' He continued: 'The principal institutions which provide international financial services on which your centre relies will not be able to be a part of your centre...they could not operate in a centre which is seen not to be operating at the level of international supervision which adheres to best practices.'

No doubt fearing the catastrophic effect of a withdrawal by major financial players, Mr Allen pointed out that the financial services institutions which conduct business in the Bahamas are based in the same major industrialised or G7 nations which are behind the increased pressure on onshore financial centres.

Other offshore financial centres have put up more of a fight than the Bahamas against the likes of the OECD and Financial Action Task Force (FATF), but the Finance Minister is far from throwing in the towel: he declared this week that what the G7 nations really want is an end to offshore financial centres per se.

But the Bahamas' cannot risk a fight and needs to continue with its conciliatory behaviour. The government has indicated that it will not be finished with its aggressive legislative agenda to counteract the international blacklisting of the Bahamas before mid-December. This week the government intends to table two new financial services bills: the Financial Transactions Reporting Act 2000 and the Proceeds of Crime Act 2000.