WITH politicians in both Jersey and Guernsey reacting sharply to claim and counterclaim about Landsbanki Guernsey’s adequacy as an institution, it is clear that both jurisdictions are acutely aware of the reputational damage that the affair could do the Channel Islands as a whole.
That, however, should not detract from the significant developments over the last couple of days.
The first is the chief minister’s assertion that depositors have not lost all their savings and that he anticipates there will be substantial recoveries from the bank. While it does not remove investors’ fears – and truly heart-rending stories of potential loss and anguish continue to pour in – his remarks would suggest something at worst in the order of a 50% return.
The administrator has also said that there are ‘substantial’ amounts of cash within Landsbanki so that a part-payment will be made to creditors and depositors, which has to be good news.
The second development is the speed with which Guernsey is putting together a credible depositor protection scheme and which is now expected to be before the States next month.
Unusually, and because of some earlier legal preparatory work, any package will not need Royal assent. So, in theory, this island could have an industry-funded scheme in operation before year-end. Having had their system of regulation implicitly questioned in Jersey, it will not be lost on islanders that should the DPS timetable be achieved, our sister island will be left trailing – having made all the fuss in the first place.
Perhaps worse than that, as we argued yesterday, the Jersey ‘scheme’ is at this stage largely a promise. It is likely to be left to a new States of Jersey in January to endorse it and that, inevitably, carries an element of uncertainty that Guernsey’s system won’t have.
The shame of it here is that the regulator was unable to persuade the industry and politicians to put a protection scheme in place when it was not needed. But then today’s calamitous global financial meltdown could not have been predicted and the consequential extra cost of such a scheme was not justified.
What is needed now, however, is for the two islands to be seen to be working together for the benefit of all investors.
Article posted on 11th October, 2008 - 9.30am
Glimmers of hope in the gloom
WITH politicians in both Jersey and Guernsey reacting sharply to claim and counterclaim about Landsbanki Guernsey’s adequacy as an institution, it is clear that both jurisdictions are acutely aware of the reputational damage that the affair could do the Channel Islands as a whole.
That, however, should not detract from the significant developments over the last couple of days.
The first is the chief minister’s assertion that depositors have not lost all their savings and that he anticipates there will be substantial recoveries from the bank. While it does not remove investors’ fears – and truly heart-rending stories of potential loss and anguish continue to pour in – his remarks would suggest something at worst in the order of a 50% return.
The administrator has also said that there are ‘substantial’ amounts of cash within Landsbanki so that a part-payment will be made to creditors and depositors, which has to be good news.
The second development is the speed with which Guernsey is putting together a credible depositor protection scheme and which is now expected to be before the States next month.
Unusually, and because of some earlier legal preparatory work, any package will not need Royal assent. So, in theory, this island could have an industry-funded scheme in operation before year-end. Having had their system of regulation implicitly questioned in Jersey, it will not be lost on islanders that should the DPS timetable be achieved, our sister island will be left trailing – having made all the fuss in the first place.
Perhaps worse than that, as we argued yesterday, the Jersey ‘scheme’ is at this stage largely a promise. It is likely to be left to a new States of Jersey in January to endorse it and that, inevitably, carries an element of uncertainty that Guernsey’s system won’t have.
The shame of it here is that the regulator was unable to persuade the industry and politicians to put a protection scheme in place when it was not needed. But then today’s calamitous global financial meltdown could not have been predicted and the consequential extra cost of such a scheme was not justified.
What is needed now, however, is for the two islands to be seen to be working together for the benefit of all investors.
Article posted on 11th October, 2008 - 9.30am