DIVERSITY within the island’s financial services sector will help it avoid the full effects of the global economic crisis, according to a local finance figure.
Prime Minister Gordon Brown met bank chiefs at Downing Street yesterday to discuss the credit crunch and its effect on the UK, but Mike de Haaff, the Guernsey Investment Funds Association representative on the Guernsey International Business Association council, said the island was nowhere near the panic stations of some in the UK.
Mr de Haaff said he felt Guernsey could weather the current economic storm better because of the make-up of its finance industry, which has strong fields such as banking, insurance, investment management and funds and closely affiliated business such as accounting and the legal sector.
‘Through our focus diversity, we do get some protection. In the funds industry, for example, there are definite opportunities when there are financial difficulties in the world because you can set up products that will take advantage of the present situation.
‘While there is distress on one hand, it’s an opportunity on the other.’
Guernsey’s reputation as a good place to do business would stand it in good stead, he said.
‘People will choose places and jurisdictions that they have faith and belief in and that they know have stability.
‘People want a place that can protect their wealth from what’s going on in the global economy and, for example, the tax challenges that are being posted in the UK.’
One of the issues discussed by Mr Brown with bosses from Lloyds TSB, Barclays, HSBC and Royal Bank of Scotland included measures to ensure lenders pass on last week’s interest rate drop from 5.25% to 5%.
This was one area that Mr De Haaff admitted could be a problem in Guernsey because while the island as a financial services sector would be cushioned in general, other parts of the economy would not.
‘Clearly those people who have mortgages will not be protected because interest rates are not set by the island, but set by the Bank of England.’
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One Article Comment
I think what Mr de Haaff is saying that a FEW people in Guernsey can prosper, while those living in houses mortgaged on fixed rates, and first time buyers suffer aneurisms at each news headline. And those wanting to buy bread in line with wage increases.
It is a pompous and arrogant stance, as was Mr Tostevins other articles concerning ‘the stupidity of questioning what was best for Guernsey as told by the Industry’.
I’m sure the hedge funds are queuing up for a slice of dropping indices and negative equity, they love it when they can predict it, like a greedy cat in the morning, but golly when it doesn’t go their way they come all tail down to their owners and plead vociferously for help.
The mentality of being able to ‘profit’ from a potential global disaster is exactly what is wrong with all this.