This Is Guernsey

By Joel de Woolfson

A SUBSTANTIAL repayment is not enough – Landsbanki Guernsey customers are demanding all their money back.

The stricken bank’s administrator has confirmed it has ‘significant liquid assets’ and Chief Minister Lyndon Trott said, before boarding a plane to China to try and promote Guernsey in the Far East, that he expected substantial recoveries to be passed to customers.

But those pledges did not satisfy many depositors, who said anything other than 100% of their money returned would not be good enough.

As one customer put it: ‘We did not gamble on a horse, we put our money in a bank.

‘Substantial amounts do not cut it.  Anything less than 100% would be a severe travesty of justice.’

Jersey announced yesterday that it would officially act to represent its residents, who it was estimated, had as much as £15m. in Landsbanki Guernsey.

The Economic Development Department has asked all Jersey residents affected by the bank’s collapse to get in contact so that the scale of potential losses could be assessed.

The minister for Economic Development, Senator Philip Ozouf, will represent depositors’ interests in dealing with the Icelandic and Guernsey governments as his department seeks to compensate Jersey resident investors.

‘I have heard many heart-wrenching stories from people who are Landsbanki Guernsey investors and we are going to group them together in order that their interests can be properly represented,’ he said.

But Senator Ozouf denied a suggestion that Jersey would be taking legal action against Guernsey on behalf of its residents.

‘Absolutely not,’ he said.

‘At no point have I said that. All we are trying to do is help those Jersey people who, it appears, may have lost a lot of money.’

Senator Ozouf had come in for criticism from Deputy Trott yesterday for his claims that Landsbanki would not have been allowed to set up a subsidiary in Jersey.

The Jersey politician had said that Landsbanki would not have passed the Jersey tests which, among other things, require a deposit-taker to be in the top 500 banks in the world.

Deputy Trott called this claim ‘inaccurate’ as Landsbanki placed at number 177.

Senator Ozouf backtracked yesterday, offering an apology and claiming his comments had been taken out of context.

‘We need to be very cool and calm about all this,’ he said.

‘Guernsey and Jersey have a great relationship and I’m sorry that comments I have made have been taken out of context.

‘I will be fully clarifying my position to Lyndon Trott and have already spoken to [Commerce and Employment minister] Carla McNulty Bauer.

‘I have the utmost respect for Guernsey and its regulatory system and I’m just sorry it has been caught up in this Icelandic problem.’

It also emerged, after administrator Rick Garrard’s comments yesterday, that a large amount of Landsbanki Guernsey customers’ money could be caught up in its fellow subsidiary, Heritable, which was put into administration in the UK this week.

Heritable’s assets have been frozen by the UK Treasury and it is unclear whether money sent to it from Landsbanki Guernsey will be returned.

Article posted on 11th October, 2008 - 9.33am