By Max Colchester | From Wall Street Journal

One day in February, a British bank regulator caught the boat on his regular commute.

Six days later, Chris Duncan arrived at work on a remote island in the South Atlantic Ocean. The critical things were there: Napoleon Bonaparte’s empty tomb; Jonathan the tortoise; the stacks of cash to count in what may be the world’s smallest regulated financial system.

Mr. Duncan is Chairman of the Financial Services Regulatory Authority of St. Helena, a rocky tropical isle 1,200 miles off Africa’s coast. Amid burgeoning global financial regulation, even tiny outposts need oversight, Mr. Duncan says.

Could the financial system of St. Helena, population about 4,600, ever implode? “Yes,” he says. Among other things, “the bank is on top of a volcano.”

St. Helena is a British Empire relic. Queen Elizabeth II has executive authority over it. The U.K. helps appoint the governor who administers its 47 square miles.

The only way to get there is by sea, as Mr. Duncan does every year. There isn’t cellphone reception. It has a currency—the St. Helena Pound—but no ATMs. It has one bank and, hence, needs a bank regulator.

Its residents, many of British, Asian or African origin call themselves “Saints.” Some are descendants of settlers who made it a stopover for sailing ships after its discovery, uninhabited, in the 16th century. Today, big exports are fish and an expensive coffee said to have been enjoyed by Napoleon, who died there in exile and was later reburied in France.

The volcano that created the island is extinct, not much of a threat to its financial system. But St. Helena faces upheaval of another sort: It is preparing for a global debut when its first airport opens next year.

“We will be the newest tourist destination in the world,” says Niall O’Keeffe, chief executive for economic development at Enterprise St. Helena, which promotes investment into the island.

Read more at Wall Street Journal