The Chairman of the Federal Reserve, Alan Greenspan, in explaining the reduction in the US rate, underlined the fact that the crisis in emerging market economies was now affecting North America and suggested that it may well intensify.
Alan Richardson, Senior Vice President, Retail Clients, said: "With the increasing need for flexibility for residents to transact in either Bermuda or US dollars, we find it necessary to tie our local rates to those prevailing in the United States in order to remain competitive for both deposits and loans. While this decrease in our base rate will be welcomed by Bermudian borrowers, it is important to remember that what is driving it is an unsettled global financial environment. "
Bank of Bermuda loan customers will receive confirmation of the decrease in rates on their next loan account statement and may contact their account administrators for further information.