AN INQUIRY is to be launched into the regulator’s handling of the Landsbanki Guernsey crisis.

This follows the bank’s customers being left out-of-pocket after administrators announced an initial repayment of just 30p in every pound held on deposit.

Many savers questioned the role of the Guernsey Financial Services Commission after it emerged that Landsbanki Guernsey had sent more than £36m. to UK-based Heritable Bank, its sister company now in administration.

Asked by the Guernsey Press yesterday why, with the knowledge that banks in Iceland were on the verge of difficulties, Landsbanki Guernsey was allowed to send large sums of money to a fellow subsidiary of Iceland’s second-largest bank, GFSC director general Peter Neville (pictured) said: ‘You have asked for a comment on the actions taken by the commission in relation to Landsbanki Guernsey and Heritable Bank in the UK.

‘This raises the whole question of the commission’s approach to the regulation and supervision of Landsbanki Guernsey.

‘It is normal practice for a regulator to have an inquiry into its performance carried out following a major event such as this. I have therefore recommended to our commissioners, and they have agreed, that an independent person of undoubted standing and expertise should be appointed by the commissioners to conduct such an inquiry as soon as possible.’