Ireland's new financial regulator, Matthew Elderfield, who was previously the head of financial regulation in Bermuda, spoke out strongly against President Barack Obama's global crackdown on tax havens when the new president was elected last November.

Elderfield, who takes up his position in Ireland in January, is expected to help win for Ireland increasing insurance and re-insurance business as the climate against offshore financial centres becomes more negative.

However Elderfield told a conference last November, just after Barack Obama was elected, that any attempts by the US to curb tax regimes like those of Bermuda would only discourage beneficial capital flows.

"Bermuda is a source of capital and the lesson in the past six to eight weeks is that you need to get more capital in the financial system,'' said Elderfield. "Changing the tax system would be high-risk and imprudent and you do it at your peril."

For years some US insurance companies have been jealous of competitors who've been able to locate to Bermuda and avail of an almost zero tax rate. However Obama has threatened to shut down certain "tax havens'', although the Bermuda authorities reject this label for the British-controlled island. They point to a series of international agreements with other countries that allow jurisdictions to share information and enter tax mutually beneficial tax agreements.

There have been rumblings iin the US for years about closing down tax "havens" and offshore jurisdictions have been the target of numerous bills put to the US Congress.