The horse has bolted
Friday 21st November 2008, 3:42PM GMT.
FOR customers of Landsbanki Guernsey, Treasury’s call for a depositor compensation scheme will both justify their anger and irritate their grievances.
The justification comes in the unequivocal message that the island and its banks got it horribly wrong. While member states throughout the European Union were compelled to have some form of protection for depositors, Guernsey used its independence to avoid the issue.
In a supreme example of wishful thinking being rudely shattered by the real world, the island failed to take the possibility of a banking collapse sufficiently seriously.
Only when it was too late, and the cracks were beginning to show in the world’s financial meringue, did government and finance institutions really start to work together towards a solution.
And only now the unthinkable has happened is it clear how high is the price of that procrastination. As a result, the island’s worldwide reputation as a responsible financial centre has been lacerated by thousands of unflattering news articles, blogs and media reports. Each highlights our folly and implies the island cannot be trusted with anyone’s cash.
The States can only hope that Treasury’s attempt to bolt shut the barn door will generate a hundredth of the same publicity.
But the truth is that a belated deposit scheme has no victims, no human face, nothing for the world to react to. As a result it will generate a few column inches in parts of the national and trade press and be rapidly forgotten.
What good that will do will be quickly wiped out by further reports of the plight of the Landsbanki depositors.
The scheme cannot be made retrospective and their fate therefore lies in the hands of the administrator and a few uninterested governments.
Exactly why did a deposit scheme take so long to get off the ground, one may ask?
Of the 47 banks registered in Guernsey 33 were private or corporate banks controlling 86% of the deposit total. Many such institutions wouldn’t hold the door open for a retail customer hoping to deposit £50,000. Some demand a minimum deposit of £250,000.
What use, they argued, was a compensation scheme to them?
Now they know. Reputation is everything.
Campaigns
Voice For Victims
Voice for Victims is a campaign aimed at promoting the rights of those affected by child sexual abuse.
This is Guernsey
Guernsey Press
All the Landsbanki depositors have been treated shamefully by Guernsey. It is the ONLY COUNTRY which has washed its hands of the Depositors within its Jurisdiction. It is keen enough to take our money, but not to give it back!!.
Report abuse
The reputation of the Island has taken years to build but days to destroy as a result of the Guernsey Banks and Governments inaction with regard to Landsbanki depositors.
Report abuse
We have been hit hard by the Landsbanki Guernsey fiasco. We are now in the process of withdrawing funds from other Guernsey Banks soon as we can because we are unhappy with the unforeseen burden of risk as well as the lack of support from the Guernsey Government.
Report abuse
Compare Guernsey’s reaction to that of the Isle of Man who immediately increased their depositor protection scheme from £15,000 to £50,000 AND included Kaupthing. They supported the case of savers despite incurring the displeasure of HM Government – who’d rather ignore offshore savers and do deals with Iceland on IceSave alone.
On the other hand, Guernsey is apparently quite happy to tow the HM Government line.
Bank in the Channel Islands again? Are you kidding?
Report abuse
The Guernsey Government has given out a clear message in recent weeks -
We don’t care about our residents. We only care about our big businesses – who can do exactly as they wish. So we will look after them instead.
Report abuse