This Is Guernsey

By Nick Mann

HM TREASURY yesterday moved to clear up comments made by Chancellor Alistair Darling (pictured) in the banking crisis hearing.

With the Guernsey and Manx authorities looking for explanations about his labelling of the Isle of Man as a tax haven and the need to take a good hard look at its relationship with the UK, the Treasury has apparently distanced itself from any constitutional implications.

‘As the Chancellor has made clear, it is vital that in these times of global economic turbulence we make sure that the financial regulatory framework between the UK and the Crown Dependencies is appropriate,’ said a spokesman.

British ex-pat savers with money in Landsbanki Guernsey and Kaupthing Singer & Friedlander IOM have been pressing for the UK to step in with its depositors’ protection scheme to cover their losses.

But the Government has been clear that responsibility lies with the respective jurisdictions.

Guernsey is expected to introduce a depositors’ compensation scheme at the end of the month, but it will not be retrospective.

The Guernsey Financial Services Commission was not contacted before Mr Darling’s statement on Monday, but as it related to the relationship between the Isle of Man and the UK it would not have expected to have been.

‘The Chancellor’s comments were of a very general nature with no specific proposals so it would be unwise to speculate on what the implications could be for any jurisdiction,’ said director-general Peter Neville.

‘The financial regulatory arrangements between the UK and the Crown Dependencies have been in place and working for a number of years.

‘The market turbulence and disruption to normal financial activity of the last two months has been unprecedented so it is appropriate that the matter of home-host arrangements should be revisited in the light of the findings from the inquiry into the Landsbanki Guernsey case and enhancements to international regulatory cooperation generally.’

He added that it was too early to say how the international regulatory framework would finally settle down and how that would impact on all aspects of jurisdictional relationships.

‘What is clear is that we have to get on with our job of regulating and supervising the financial services firms in Guernsey at the same time as preparing for any changes of this kind.’

Jersey Chief Minister Frank Walker said the first thing the island wanted to do was get a full transcript of what was said at the hearing so the context could be understood.

‘It’s difficult to give a comprehensive reaction until we fully understand what was said,’ said Senator Walker.

‘We in Jersey remain very confident of our position, We’re not in a position where we have to be seeking any financial support from the UK Government and never would we be.

‘We are confident that the UK Government will recognise the quality of Jersey, the strength of our banking system, the strength and regulation of bank licences. We’re among the world leaders. We’re also confident we’ll be endorsed by the IMF.’

Article posted on 6th November, 2008 - 1.00pm