Little Bay, Montserrat Little Bay, Montserrat Little Bay is a town under construction, intended to be the future capital of the Caribbean island of Montserrat. It is adjacent to Brades. The official capital of Montserrat at Plymouth in the south of the island was abandoned since 1997 after it was buried by the eruption of the Soufriere Hills volcano. Interim government buildings have since been built at Brades, becoming the political capital in 1998. The move was initially intended to be temporary, but it has remained the island's "de facto" capital ever since. The project is funded by the Government of Montserrat and
Long-Term Capital Management invested in other derivatives such as equity options. Under prevailing US tax laws, there was a different treatment of long-term capital gains, which were taxed at 20.0 percent, and income, which was taxed at 39.6 percent. The earnings for partners in a hedge fund was taxed at the higher rate applying to income, and LTCM applied its financial engineering expertise to legally transform income into capital gains. It did so by engaging in a transaction with UBS (Union Bank of Switzerland) that would defer foreign interest income for seven years, thereby being able to earn the more favourable capital gains