Bank protection scheme is up for debate next week
Friday 21st November 2008, 2:28PM GMT.
A FAST-TRACKED scheme to compensate savers if a bank collapses is ready for approval next week.
It would see retail bank depositors protected for up to £50,000, but with the total claim on it limited to £100m. in a five-year period, customers could in certain circumstances end up with less.
The scheme’s introduction was hastened by the collapse of Northern Rock and then Landsbanki Guernsey – but the scheme will not be applied retrospectively.
Treasury minister Charles Parkinson (pictured) led the technical group that drew up the plans and said it had not been possible to introduce it any more quickly. ‘We looked at what might be available in other jurisdictions and rapidly concluded we didn’t want to copy any of them exactly, although there was a fair input from the Gibraltar and Isle of Man schemes,’ said Deputy Parkinson.
‘We felt none of them allowed proper proportion of risk for banks in the scheme. We came up with something that was the Guernsey model that’s a bit different from the others, different because other schemes are either pre-funded or post-funded.’
The first £20m. would be covered by a States captive insurance company, then £10m. would be paid by all licensed banks equally and the £70m. balance in the event of a collapse would be met by the banks in line with their eligible deposits and the ‘risk’ they represented.
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Great, Mr Parkinson. But why on earth didn’t you do this BEFORE Landsbanki Guernsey imploded. You had plenty of time to do so after Northern Rock.
You could have tried to make amends – had you had the political will – by, at the very least, implementing the scheme retrospectively up to £50,000 to cover LGL deposits with public funds, as the Isle of Man has honourably done with KSF.
What a fiasco.
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Horses and stable doors come to mind, Mr Parkinson.
The banks of the State of Guernsey are experiencing a HUGE exodus of funds and your actions are not going to stem the flow.
Honour? Mr Parkinson doesn’t know the meaning of the word!
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Several years late…….
But Parkinson still hasn’t got it right.
It should be £50k with no provisions.
“Customers could in certain circumstances end up with less” is un-acceptable.
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I am afraid that these brief outlines of the scheme give me no comfort whatsover.
I have tried very hard to be loyal to “Guernsey” and have waited to see details of the scheme before I transfer all my hard earned savings out.
I will hang on until after the States debate but even I don’t know why.
I think that depositors who have no loyalty to “Guernsey” and who haven’t already jumped ship will do so with undue haste.
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I’d have to say that’s pathetic proposal.
I personally had £250k deposited in Guernsey until it all kicked off in September. I pulled my money out & have been waiting on the details of the Guernsey compensation scheme ever since.
The proposed £100m ‘pot’ divided by £50k amounts, only means 2,000 Saver’s depoits are protected. If a big bank fails…it’s highly likely there’ll be more than this wanting compensation.
Best locate your old clothes in Guernsey because your main industry is going to be growing Tomatoes again. (ie with such a poor compenastion scheme, nobody is going to deposit money in Guernsey)
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