This Is Guernsey

By Simon Tostevin

NatWest’s parent, RBS, has seen its share price fall sharply. (Picture by Peter Frankland, 0651525)

ISLANDERS should expect things to get worse before they get better, the Guernsey International Business Association has warned.

The warning comes after the dramatic events of yesterday, which saw Landsbanki Guernsey put into the hands of administrators.

Giba vice-chairman Paul Meader said people had to remember that Guernsey was not an island as far as its finance industry was concerned.

‘Tumultuous events are unfolding internationally and it would be naive to think that Guernsey can remain entirely immune from these events. There will be more bad news before this downturn is over and, as a community, we have to be prepared for leaner times over the coming months.

‘However, we are relatively optimistic that Guernsey’s position as a major international finance centre will remain intact and, indeed, may be enhanced by recent events.’

He said Guernsey had two advantages over most jurisdictions: its finance industry was highly diversified rather than solely dependent on banking and its banking sector was more involved in deposit-taking than in lending.

‘There are good reasons to think that Guernsey’s finance industry will prove more robust than that of many jurisdictions but the scale, pace and extent of the global downturn in financial markets, and in the real economy, will not leave Guernsey unscathed, as these recent events with Landsbanki demonstrate.’

Mr Meader also advised islanders who had concerns about their investments to approach the banks themselves or the administrators directly.

‘We appreciate that these are worrying times for islanders but Giba is a trade association for the finance industry and as such is not placed to deal with queries from individuals about their accounts.’

Guernsey’s Citizens Advice Bureau is also reporting an increase in enquiries as to what clients should do with their savings.

‘Many people are clearly worried about where their money will be safest but we are not qualified to give this kind of advice,’ said bureau manager Kate Raleigh.

‘We are also asked about whether there are branches of particular banks here but we suggest that people contact the Guernsey Financial Services Commission as it could be that the local branch of a bank would count as “offshore” and may therefore not be covered by the same guarantees as those based elsewhere.’

Article posted on 8th October, 2008 - 2.29pm