AS THE extent of the potential personal and financial tragedy implicit in the Landsbanki affair becomes clearer - and more horrifying - it is understandable that those who believe they have lost a lifetime’s savings want someone to blame.
And in the context of a regulated financial services arena, who better than the regulator and the politicians who set up the framework of control in the first place?
Pointing the finger seems especially relevant given the comments in Jersey by Senator Philip Ozouf, the Economic Development minister, who told that island’s States that not only would Landsbanki not have been allowed into that island, it would not have passed crucial top 500 and Basle banking standards.
The implication is clear: Guernsey runs a shabby regulatory system and one without, as yet, a depositor protection scheme so investors have only themselves to blame.
In reality, however, and as we report today, Landsbanki would have met all of Jersey’s criteria and then some. Senator Ouzouf’s remarks, in that context, appear deliberately misleading and designed to damage Guernsey. Alternatively, for a minister seeking reelection, he is remarkably poorly briefed.
And what he has done by commenting on this island’s attempts to put a fully-funded deposit protection scheme in place is to highlight the frankly parlous state of Jersey’s promised scheme. That appears to have been floated in haste on the basis that it will never be needed. Since Jersey does not have the collateral to cover its £10.8bn of resident deposits, savers will have to hope it isn’t.
That is one reason Guernsey avoided a knee-jerk reaction to Landsbanki. Another is the discriminatory, local individuals only, nature of what Jersey States will be asked at some stage to ratify.
Given the UK Chancellor’s legal action against Iceland and his comments about the importance of the Icelandic authorities ensuring UK depositors in Icesave are given the same protections as depositors in Iceland, Jersey would struggle to maintain a ‘protection’ that disadvantages British and other savers.
Landsbanki customers might want to blame someone, but the Guernsey Financial Services Commission could not prevent the collapse of Iceland’s economy, which is the real cause of this disaster.
Article posted on 10th October, 2008 - 2.07pm
Don’t blame regulators for the mess
AS THE extent of the potential personal and financial tragedy implicit in the Landsbanki affair becomes clearer - and more horrifying - it is understandable that those who believe they have lost a lifetime’s savings want someone to blame.
And in the context of a regulated financial services arena, who better than the regulator and the politicians who set up the framework of control in the first place?
Pointing the finger seems especially relevant given the comments in Jersey by Senator Philip Ozouf, the Economic Development minister, who told that island’s States that not only would Landsbanki not have been allowed into that island, it would not have passed crucial top 500 and Basle banking standards.
The implication is clear: Guernsey runs a shabby regulatory system and one without, as yet, a depositor protection scheme so investors have only themselves to blame.
In reality, however, and as we report today, Landsbanki would have met all of Jersey’s criteria and then some. Senator Ouzouf’s remarks, in that context, appear deliberately misleading and designed to damage Guernsey. Alternatively, for a minister seeking reelection, he is remarkably poorly briefed.
And what he has done by commenting on this island’s attempts to put a fully-funded deposit protection scheme in place is to highlight the frankly parlous state of Jersey’s promised scheme. That appears to have been floated in haste on the basis that it will never be needed. Since Jersey does not have the collateral to cover its £10.8bn of resident deposits, savers will have to hope it isn’t.
That is one reason Guernsey avoided a knee-jerk reaction to Landsbanki. Another is the discriminatory, local individuals only, nature of what Jersey States will be asked at some stage to ratify.
Given the UK Chancellor’s legal action against Iceland and his comments about the importance of the Icelandic authorities ensuring UK depositors in Icesave are given the same protections as depositors in Iceland, Jersey would struggle to maintain a ‘protection’ that disadvantages British and other savers.
Landsbanki customers might want to blame someone, but the Guernsey Financial Services Commission could not prevent the collapse of Iceland’s economy, which is the real cause of this disaster.
Article posted on 10th October, 2008 - 2.07pm