The London Stock Exchange saw another turbulent day, but ended up 1.74%. (Picture by PA News, 0647397)

A DEPOSITORS’ protection scheme is essential for Guernsey to show the world that it looks after people who do business here, according to the Guernsey Financial Services Commission.

Director-general Peter Neville said a team of banking representatives and commission experts have been tasked with producing a plan for such a scheme.

‘We issued a consultation paper on a number of changes to bank regulation in Guernsey and that ended on 15 September. One of the recommendations is that we should set up a deposit protection scheme here. Other matters include limiting the upstreaming of funds from subsidiaries to parents, more transparency about what kinds of business banks do and the relationship between the local bank and its parent and more monitoring and better communication with the parent regulator. Some of these we are doing already.’

The current period of turbulence and chaos would end but what was needed was the re-establishing of trust and confidence in the banking system, said Mr Neville.