On Monday in George Town in the Cayman Islands a recently elected member of the Legislative Assembly, Mr Cline Glidden, made it clear that he didn't think much of the Organisation for Economic Co-operation and Development's (OECD's) campaign against tax havens.

The chamber, a large room in a low, flat-roofed building directly opposite the court house in the town centre, was less than full. The speaker was slumped in his large leather chair and the few members who were in attendance occasionally leaned their heads together and had whispered conversations.

It was time, Mr Glidden said, that the Cayman Islands lobbied to defend itself from an unfair campaign being conducted by some of the most powerful states on earth and aimed at damaging what are the vital economic activities of small island nations. The same jurisdictions that were complaining about offshore islands had problems in their own financial services sectors, which exceeded in size the deposit base of the Cayman Islands.

The campaign was a hugely hypocritical one, he said. He sounded very aggrieved and, listening to him, it was hard not to feel that perhaps a great injustice was being done.

However, many Caymanians believe the islands have no problem dealing with the OECD and that the future of the islands' financial services sector is secure.

Earlier on Monday Mr John Bourbon, managing director of the Cayman Monetary Authority - the Cayman equivalent of our central bank - confidently expressed that view during an interview with The Irish Times.

The Cayman Islands, he said, had some $800 billion (€900 billion) on deposit, is the fifth-largest financial centre in the world, and business is growing.

The islands have nothing to fear, he said, from the OECD's campaign against tax havens or the Financial Action Task Force (FATF) campaign against money laundering, a parallel exercise initiated by the G7 members.

The reason is that the Cayman Islands is now a sophisticated financial services centre dependent for most of its business on institutional or corporate clients who are anxious to achieve tax savings but cannot be seen to be associated with anything suspicious or illegal.

"The issues which arise to do with private clients are really more prevalent in other retail financial centres, which I wouldn't consider the Cayman Islands to be," he said.

In other words, there may be offshore locations with much to fear from the OECD or the FATF but the Cayman Islands is not one of them.

"The Cayman Islands used to do a lot of private client business but much of it has been cleaned out and the rest is going fast," according to another source. "In the 1970s it was literally true that people were coming here with suitcases full of money, but that's all over now."

The reputation of the Cayman Islands may not have caught up with its reality but it is also true that the reality of what went on in the past has not yet worked its way out of the system. There are huge amounts of money and other assets on the islands that have their origins in the days when no-one asked questions. There are also clients left over from those days and information about former clients, which is what the court case before the Hon Justice Mr Anthony Smellie is all about.

The case is being heard in camera in a room in a commercial building next to the courthouse. It is an ugly airconditioned and windowless room that opens almost directly onto a car park - an unlikely location for what is a very important case for the Irish public and the Cayman banking community.

What is at issue is whether the bank, Ansbacher Cayman, should be allowed to give details about clients' affairs, going back to the 1980s, to the Irish High Court inspectors inquiring into the Ansbacher deposits. The court must decide if the Cayman secrecy law, the Confidential Relations (Preservation) Law, allows for such an act.

A crucial point is that the bank has approached the court looking to give the information. In 1997 the McCracken (Dunnes Payments) Tribunal approached the Cayman courts seeking to have the authorities instruct Ansbacher Cayman to provide information. The court declined the request.

Former Ansbacher clients are objecting to the bank's application to the courts, which is not surprising given that these same clients were originally attracted to the Cayman bank by promises as to the lengths the bank would go to to preserve the confidentiality of its clients' affairs.

The reason the bank is suggesting it should hand over the information is that it is now part of a global financial organisation that needs to guard its good name.

In the world of global capital and global financial services companies, there is a commercial imperative to being seen to be above board.

Similarly, because of globalisation and the reaction of the major economic powers, there is pressure on offshore locations to comply with the sort of demands being made by the OECD and the FATF.

It is because of the international pressures that some parties believe public policy may swing the Ansbacher case in favour of releasing the information.

However, others believe such an outcome is unlikely.

As a result of OECD pressures and to keep its name off an OECD list of "uncooperative" offshore locations, the Cayman authorities have made a commitment to introduce cooperation with foreign jurisdictions in relation to criminal tax matters by the end of 2003 and for civil tax matters by the end of 2005.

However, what these commitments mean is that after those dates the islands will enter into mutual agreements with other jurisdictions for the exchange of information in relation to advanced revenue inquiries.

It is unlikely that the agreements will be retrospective.

According to one senior banker, the granting of the Ansbacher application would mean that a level of cooperation with a foreign authority, which is probably in excess of what is envisaged for four years down the line, would suddenly be sanctioned in the formerly secretive Cayman Islands.

"I think that would come as a shock to some people and would create a level of concern. Some people might become scared and decide they can't trust the Cayman authorities."

Overall, however, every source in the financial services industry in the Cayman Islands concurs with the view that whatever happens in relation to the transfer of information concerning private clients to foreign authorities, it will not hit the core business of the Cayman Islands.

Mr Bourbon believes the islands' financial services sector is widely recognised as being clean and professional.

His focus is on cooperation in the fight against money laundering rather than on tax matters.

"The vast majority of the banks here are operating for major international banks subject to their home regulatory bodies."

The fact that these banks are operating in the Cayman Islands implies that their home regulatory authorities are satisfied with the Cayman financial services sector's standards, he said.

There is, he added, regular contact between his office and the Irish central bank.

A large number of Cayman registered mutual funds are administered in the International Financial Services Centre in Dublin.

"There is a lot of healthy business between the two," he said. "We regularly speak to the Central Bank of Ireland about funds. They ask about directors operating here and vice versa. That takes place all the time."