THE nationalisation of Bradford & Bingley this morning hammers another nail into the coffin of the freewheeling financial world of the boom years.

With the US struggling to agree its enormous £380bn rescue plan for the American financial system, it is clear that governments on both sides of the Atlantic will never again allow themselves to be placed in such a position.

Guernsey may so far have escaped relatively unscathed, but it would be foolhardy to believe that the new tighter regulations which will follow this series of government takeovers, bail-outs and purchases will have no effect on the world’s 16th most competitive financial centre.

Which is as it should be.

For not only is it taxpayers’ money being used to rescue the international banking system from collapse, but those same taxpayers are often the hundreds of thousands of small shareholders who stand to lose out. And it is they, not the City slickers with seven-figure bonuses and ski lodges in Val d’Isere, who will suffer most in any recession that follows.

While Guernsey cannot be tarred with the same brush as the gamblers who have wreaked havoc in the world’s money markets, it is important that the island prepares well for the inevitable backlash from a disgruntled public with fresh memories of multi-million pound bank profits and fat cat executive salaries.

The key must be to promote how well-regulated and secure Guernsey is compared to some of its competitors. Years of having to justify our existence while adhering to the strictest rules should prepare the island speedily to take on board whatever new regulations are thrust upon us.

One aspect of that – and an area the island sadly still lags behind the UK – is a deposit protection scheme.

People’s life savings need some form of protection. It may be complicated to set up but nobody in the banks, government or independent watchdogs should be under any illusions how important to consumer confidence an effective and secure scheme is.

Its speedy introduction – with a realistic level of compensation – must be a matter of priority.