Island ‘likely to escape’ G20 blacklist inclusion
Thursday 26th March 2009, 2:29PM GMT.
GUERNSEY is set to reach the finish line in its efforts to escape being blacklisted by the G20, the chief minister believes.
The OECD has produced a list ahead of the G20 meeting on 2 April naming jurisdictions which it considers are not currently making sufficient progress to meet agreed international standard on transparency and exchange of information.
Inclusion on the OECD list currently means the island had not signed 12 tax information exchange agreements.
But Chief Minister Lyndon Trott (pictured) is set to conclude three bilateral agreements this week, taking the island to a total of 13.
The finalisation of these documents marks the end of a lengthy negotiation process with each of the co-signatory countries.
An agreement was signed with French Finance Minister Christine Legarde at a ceremony in Paris on Tuesday.
Deputy Trott will today sign a bilateral agreement with Germany at a ceremony in London with German Ambassador Georg Boomgaarden And one with Ireland will be signed by the end of the week.
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RUNNING SCARED: That’s the way it looks to the members of the Landsbanki G20 (expatriates) Action Group.
Our aims and ambitions are clear, we consider that Guernsey is an unsafe jurisdiction to invest in and we will make vigorous representations of this fact to members of the G20 Conference
This is made abundantly clear in the way that the States of Guernsey, it’s Chief Minister, Treasury Ministers and members of the Policy Council have “hung out to dry” the depositors of Landsbanki Guernsey who trusted your juristdiction with their hard won savings it must be said that some 700 hundred of them are from your own Island, some of them suffering in poor circumstances.
We will not desist in our fight to redress this monstrous state of affairs until each and every one of us receives 100% of our stolen savings.
Our very latest initative will be the targeting of future seminars held in different centers by “Guernsey Finance”
As said this article says it all, “Running Scared: !!!.
SPRINGBOK.
Landsbanki G20 (expatriates) Action Group
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Still no sign of the balance 70% of our money misappropriated last October due to gross incompetence and the Guernsey auothorities failing to warn us or act to recompense us.
Yet those with funds in IOM were all looked after . How can that be and how can Guersney possibly be seen as a viable financial centre when it has left 1600 people short of hard earned savings ?
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Guernsey administration transparent – just like the titanic was seaworthy.
How can an administration which has no Freedom of Information act; No accountability of deputies to the electorate and no responsibility to report or disemminate information gathered by its regulatory bodies be deemed as worthy. Countries such as Montenegro have more transparent government and also support their electorate when ‘well regulated’ financial institutions fail in its jurisdiction. What does the Guernsey administration do – wash it’s hands and jets off to China.
I hope the G20 realises what an unenlightened jurisdiction Guernsey is and rewards it accordinly with a well deserved black listing. The fact that other members are willing to sign bilateral agreements with Guernsey is a sad indictment of the state of political morality today
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I fully agree with springbocks comments.
I too have had had money stolen from me by the collapse in the Guernsey financial system and to see Minister Trott acting as if nothing has happened is a total disgrace
Stevie
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I think the States of Guernsey as a nation deserves to be blacklisted – not because of any failures in transparency or exchange of banking information but because of its failure to protect or support savers in Landsbanki Guernsey. In this respect, in my view, it has demonstrated itself to be morally bankrupt. At least one saver is dead, some are having to give up their homes, many are ill and enduring hardship. Many are citizens of Guernsey! Mr Trott and Mr Brown – you can sort this out – without spending any significant taxpayers’ money – and regain some respect!
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Blacklist or not, I suspect that very few of us Landsbanki victims will put our money anywhere near Guernsey whatever guarantees they might claim to offer. Support for our action group is growing along with coverage in the international press. The word is spreading that Guernsey is the only administration to have done nothing to aid the plight of victims of the Icelandic banks fiasco. The Americans have a good word for the island’s behaviour ( or lack of it ); TACKY…… Sums it up nicely.
Lyndon Trott could be kidding himself if he thinks that all will be roses again soon because of a couple of signed agreements. We victims as a group continue our campaign with increased vigour.
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Mr. Trott may conclude as many agreements as he likes, but this sudden rush of activity to safeguard the island’s financial standing cannot not hide the simple fact that under his and his Administration’s governance a Guernsey bank looks like having lost depositors money. Not shareholders or bond holders investments, but savings of ordinary people, mostly retired and with no chance of earning any new income. Those countries that have jumped to bed with Mr. Trot should take note. How much can they trust someone who has failed in the most basic fiduciary duty to those that entrusted their life savings to a bank under his regulatory supervision.
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The relationship we savers had with Guernsey is tantamount to the end of a love affair – when trust has gone the relationship is doomed – can anybody direct us to RELATE?
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Guernsey should definitely be blacklisted being the ONLY COUNTRY in the Western World which has not assisted the savers who deposited money into banks managed under its jurisdiction.
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Don’t the peolpe who run Guernsey get it???
“Let’s put this in perspective. Guernsey has no outstanding debt unlike most other countries. If Guernsey were to immediately repay the remaining 70% to depositors, its net cost after realisation of the bank’s assets over the next couple of years, would likely be in the £0 – £20m range, say. A £20m cost corresponds to 1% of GDP! Hardly unaffordable. And the big bonus would be that it would restore their tarnished reputation, therefore securing extra business in the future and low local taxes.”
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I speak as an idiot who deposited quite a lot of money in Guernsey, feeling that it would be safer there than in Hungary, where I live. How wrong I was. Still, I think Guernsey still has every chance of escaping the wrath of G20. The first move is to get rid of Trott and his band of incompetents and show positively that the island is setting itself up at last as a responsible grownup jurisdiction, willing to look into the firms that offer banking services in it and to act promptly when a charlatan like Landbanki Guernsey appears, not just grab the tax revenue and sit on its hands. By acting properly I mean cooperating responsibly with the Landsbanki Guernsey administrators to ensure that depositors get their money back. Instead the Trott regime decided to reject a simple scheme to finance the early return of some of our money. You can’t enjoy the tax revenues from a finance centre if you are not prepared to take responsibility for what goes on in your island—as the Isle of Man, Luxembourg, Andorra etc. have begun to do. Otherwise it will be back to growing tomatoes and doing a bit of inshore fishing, guys! You have been warned.
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Of the savings options open to you at the point of investment you chose to invest with Landsbanki (I assume to take advantage of the high rates of interest on offer). Put simply high rates of return are accompanied by increased risk.
It was the failure of the icelandic banking system and not Guerney’s that resulted in your loss of savings. The failure of the Guernsey system was that there was not adequate depositors protection in place, this has nothing to do with the transparency of the jurisdiction or the other forms of legilsation in place which facilitate the finance industry.
Landsbanki G20 Action Group, is your ultimate aim the recovery of your stolen monies from Landsbanki or the bankrupcy of an islands economy which is based soley on the finance industry? If by lobbying the G20 you achieve the ultimate worst outcome you are potentially putting all 65,000 odd of the population in perilous circumstances as the cumulative effect of job losses within the finance sector, the pull out of banks, funds etc would be disasterous.
By all means persue the States of Guernsey for assistance with the recovery of your savings but do not put in jepody the island and the livelyhoods of the population!
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I deposited in Guernsey my husband’s death-in-service grant and my own savings from an unbroken working career. These investments were intended to support me in my retirement. I believed that I could trust Guernsey with my hard-earned savings. To my cost, I have found out this is not the case. There is no doubt that Guernsey should be blacklisted.
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Mr Trott’s own inactions to help savers (not investors) who have deposited money on Guernsey has had a direct impact on how the Island is perceived internationally. How can he stand as a politician, working on behalf of the people, when he has turned his back on so many of them. How can he claim to lead a well regulated financial centre when Guernsey is the only Western Country to have a track record of failing to help its investors? Not only has he failed to help resolve the situation, but he has blocked suggestions by the administrators and also failed to take clear opportunities which have not been missed by UK/ Isle of Man politicians.
And then he acts like nothing bad has happened….out of touch, ignorant or just unwilling to care as long as he’s not affected himself?
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It is good to see that Mr Trott has the time to sort out in what seems to be a bit of a panic the agreements to not be on the OECD list. It is also a crying shame that he does not seem to have the inclintion or the will to help the 1600 depositors of Landsbanki Guernsey. Lets hope that whatever happens, the rest of the G20 see him and through him the Guernsey financial system for what it is i.e. a bit of a sham
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Depositors in Landsbanki Guernsey, are the ONLY ones not to have been bailed out by the government of the jurisdiction in which accounts were held.
Perhaps Guernsey should look very, very hard at whether or not it is really equipped to claim that it is remotely justified to claim that signing a few tax agreements really qualifies it to claim a, “reputation as a well regulated international financial centre.”
Guernsey’s authorities’ willingness to grab all the financial benefits from the financial sector (£1 billion/annum according to the latest figures) is not backed by the fundamental acknowledgement that there is also a potential downside whereby a responsible jurisdiction plans for, and implements, expeditious protection of those savers caught up in the failure of a bank within its regulatory jurisdiction. Despite professional advice over ten years ago, Guernsey did nothing.
Responsible governance is not judged on the good times. Responsible Governments – like those other countries ALL of whom have already come to the aid of savers in their jurisdictions – means doing the honourable thing and using a small part of the revenues gained in the good times as a matter of honour when thing go wrong.
Frankly Guernsey, if your elected officials and financial regulators are incapable of understanding this simple truth, then perhaps a return to agricultural revenue streams might be preferable to trying to pretend to be competent professionals capable of effective regulation and responsible administration in today’s financial world, where such naivety would be laughable . . . if it wasn’t so tragic for so many.
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Guernsey should be blacklisted as the only country in the DEVELOPED world not to support savers!
The situation that Landsbanki savers find themselves in is a disgrace to the Bailiwick. We entrusted our life savings in this bank, which had a guarantee endorsed by GFSC.
Many Islanders – not just ex-pats – have been sorely let down.
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I want my money back from Landsbanki…all of it. This is pure THEFT. Guernsey is closing its eyes and the UK is sending out FALSE messages saying that we have been refunded – we have NOT. This is our pensions, we have nothing else. We are now living like tramps, and YES, we have paid our taxes on our savings, IT IS SUBTRACTED AT SOURCE!!!!!!!
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I am devastated that Lyndon Trott can ride rough shod over people like me who have lost their life savings and are suffering awfully:
Guernsey and its politicians have no heart,dont care and I really hope Guernsey hits hard times and then they may realise the anguish of the Landsbankii savers
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I too want my money back from Landsbanki Guernsey…all of it. We invested with Cheshire-Guernsey who sold out to Landsbanki, we were informed by Landsbanki on the same day that it collapsed that “the bank was working fine and that our funds were protected”…..lies, lies, lies, and more lies. Where is our money today???
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we have lost all our savings on Guernsey – Cheshire Guernsey/Landsbanki. This mney has not been given back, we consider this theft, and want our monies back.
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We have lost all our money in Guernsey – who took it, where is it, and why ?
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The total moral bankruptcy, incompetence and the “have your cake and eat it” attitude of the Guernsey Administration should speak volumes to potential savers.
Protecting depositors comes ahead of collecting tax from them. Geddit Mr Trott? I doubt it.
What did you do to get Landsbanki Guernsey included in the conditions for the IMF loan to Iceland? We have a right to know.
From what has come out of the TSC hearings it seems you have done sweet FA – cynical irresponsibility. But that would be par for the course wouldn’t it Mr Trott because you don’t care and it shows.
Landsbanki saver (or loser)
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Why did none of you spend 1% of the time you have put into these and other blogs into researching the Bank you chose to put your money into? It was the Iceland bank that failed not the branch that was in Guernsey. Those of us who did have money in Landsbanki and saw what was happening are not in the minority, withdrawing over 5 months before it went to the wall. Look at the councils in the UK who lost money even though they were warned, those responsible will lose their jobs and rightly so! Take responsibility for your own actions, you chose to chase the best return around the globe instead of choosing your own high street banks, stop blaming everyone else.
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Due to the passive approach of Guernsey to assist the Landsbanki depositors, I think Trott etc. spoilt it for good. Any consideration for future investments in Guernsey will be re-considered in light of his tactics and moved to better places, i.e IOM. The word is getting around and is spread further by people like me, disappointed depositors and friends and will leave a lasting mark. He can sign many papers but he will never be able to get rid off that dirt mark for good.
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It is time that the Guernsey government owned up to its responsibilties. You took taxes from us while your banks had our money. You promised that our ‘money is safe in Guernsey’. You stood by and have done nothing but lie about ‘seeing what could be done’ and ‘supporting’ us while we were robbed of 70% of our life savings. Several Guernsey deputies have adnitted that they had misgivings about Landsbanki months before it crashed. They did precisely nothing. Now you have closed the stable door after the horse has bolted and, once again, anyone who believes your promises is ripe for the bilking.
Do not be surprised if people look elsewhere to bank their money. Shame on you Guernsey ‘government’. Shame on you.
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I lost not only my life savings but the small inheritance my father left me. We had our money in a builiding society – Cheshire Guernsey – because we did not want to take risks.
The Landsbanki promised to stand behind Landsbanki Guernsey. They lied. They stole our money. Why was nothing done to stop them? Why has the government which promised to look after money in Guernsey so famously, done nothing but dodge responsibility and lie? If you do nothing to help us, I think that your banking days are drawing to a lose. I hope so.
You are thieves accomplices, turning a blind eye while honest hardworking people are robbed.
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Guernsey, you are finished as a banking centre. The UK banks devised a scheme whereby all expatriates could not open an onshore account to help these Islands to stay afloat. Those days are coming to an end, soon all expatriates will easily be able to open onshore bank accounts once again, thus eliminating the need for such risky cash deposit exposure. Mr Trott clearly is not a man of his word and should be thrown off the Island and give 10 years hard labour. The man clearly has never worked hard like the majority of collapsed bank Landsbanki depositors, who saved in this so called well regulated and safe banking domain. Lets not all laugh too loud, he’ll be thinking next, well, shall I start to work behind the scenes. Behind the scenes, the man clearly has absolutely no compassion. Our banks are doing well and there has been no long term effect upon our economy, really!
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Interesting to note how many UK Councils got caught out by the Icelandic collapse despite their armies of financial advisors
They probably had eyes firmly focussed on the 7% interest rate
I’m sure the work being undertaken to retrieve the lost funds has not stopped and hopefully with a little patience things will improve later this year
The 30% already retrieved is probably in many cases far more than the £50,000 currently guaranteed to depositors in other Guernsey branches
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As a Landsbanki saver who lost 70% of the money earned and saved by my mother, a Guernsey native, I am thoroughly disgusted at the States’ complete lack of support of any kind.
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Guernsey is clearly not a jurisdiction to be trusted leaving asisde any tax haven issues. Landsbanki was regulated by the Guernsey authorities yet when the bank collapsed on Guernsey’s watch the authorities looked the other way and left some 1600 depositors-many elderly and now poverty stricken-totally adrift.
I trust that fund managers will think twice about remaining in a place which has demonstrated such a cavalier and callous disregard for the victims of an entity it regulated and derived income from.
I will certainly be lobbying the funds in which I and my friends and familiy have money invested to move to a safer jurisdiction.
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The only way Chief Minister Trott and his deputies can redeem themselves, and the country they think they represent, is to help the savers who trusted Guernsey as a safe place to deposit their savings. The ‘sit on your hnds’ attitude when Landsbanki-Guernsey went into administration was the act of those who don’t know how to rise to a crisis. A Chief Minister is supposed to lead not just be a yes-man to the UK Government when the going gets rough. Why was there no outcry when Landsbanki ‘Icesave’ depositors got back their savings and yet Landsbanki-Guernsey, with funds sequestered, has had no redress. Dithereing is all that happened.
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I have lost money in the collapse of Landsbanki which means that the lifestyle of my wife and I will be severely curtailed (both retired). Guersey has done sod all to help = 0f course Guernsey should be blacklisted. No one should be advised to invest moneyt in instutins which are domiciled in this Island. The isalnd should be alowed to sink in ignominity into the English Channel. They should revert to tomatoes if they need money.
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The Island of Guernsey has prospered over the years with the help of investment. A small amount of this investment was made by hard working savers who chose to bank their money for their retirement in the Guernsey Branch of the Cheshire Building Society – not to dodge tax – it was deducted at source, simply because in some cases the interest was slightly higher and in other cases, ex pats are unable to open a UK account without a UK address. The savers with Landsbanki are honest hard working people who over the years have contributed to Guernseys economy. Many are citizens of Guernsey! Lyndon Trott and Gordon Brown – you could do the right thing and easily sort this out – without spending any significant taxpayers’ money – just look at the cost to taxpayer for this G20 summit – not to mention Goodwin, McNulty, Aplegarth, Smith .. the list is endless.
Guernsey should definitely be blacklisted being the only country in the Western World which has robbed the savers who deposited money into banks managed under its jurisdiction.
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Guernsey has let itself down and the otherwise good name of the Channel Islands as a financial centre by its unwillingness to accept that a mistake was made in allowing a Banking organisation, Landsbanki by name, to operate from its shores. Confidence in the Channel Islands as a financial centre to be respected could have been retained by refunding the savings deposited in good faith in that Institution. Too late now I fear — Goodbye financial services in the Channel Islands -as A Jerseyman I am ashamed !!
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Guernsey will not assist savers unlike every other country. They have stood back and condemned over 2000 mainly British savers including myself to a life of poverty. There is no way I can replace 70% of my life savings now. Thank you Guernsey.
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Remember Gordon Brown’s words Mr. Trott (in relation to Landsbanki Guernsey) that the “doing nothing approach is not an option.” – Guernsy’s future is all about financial confidence.It is entirely your problem and it won’t go away by ignoring what happens to Landsbanki Guernsey depositors savings.
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RUNNING SCARED:
The following extract from Gordon Browns speech says it all,which no doubt spured Mr.Trott into his recent action as per the article above, at best Guernsey and other Offshore Havens are going to be used as scapegoats for the west’s mismanagement of the worlds economy, to bad that Landsbanki customers have to suffer this ignominy, Brown might have ‘saved the world’ but it does not look like he is going to save Guernsey.
(One of the key issues in his speech was to say how tax havens had to be eliminated, repeated several times over. How he is to do that he did not say but they are, according to him and the EU leaders, virtually the devil’s work, stealing money that should be tax income for one country or another.)
SPRINGBOK
Landsbanki G20 (expatriates) Action Group
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Further to my posting at 6.16 last night; I do hope Guernsey gets blacklisted; Landsbankii stated in their brochure that Guernsey offered a secure place for my savings which has turned out to be totally untrue: the only country in the world that has not offered succour to those savers who have lost all.
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Lyndon Trott is spending all this time and money dashing round the world in his attempt to escape G20 blacklist inclusion. Does he not feel he has a moral obligation to put some time and effort instead into supporting Landsbanki Guernsey savers? I suggest during his travels he should visit the Isle of Man to learn something about morals and how a government should react in these circumstances.
We are nearly 6 months down the line since Landsbanki collapsed – and more determined than ever – we are prepared for a long battle and we will not rest until our savings are returned in full. Our tireless work to date has given its rewards – we already have many leading financial journalists, Deputies, MP’s, and MEP’s on our side. It is only a matter of time until the whole world hears the truth about Guernsey’s inaction. Guernsey has benefited enormously from the financial industry for years – now is the time to return a minute proportion of that benefit by supporting Landsbanki savers. Hopefully for its residents this will happen before it is too late to even attempt to save Guernsey’s reputation.
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Bankers and Politicians seem to coexist rather too snugly look at Ex RBS Chairman.
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I also agree that Guernsey should definitely be blacklisted being the only country in the Western World which has not assisted the savers who deposited money into banks managed under its jurisdiction.
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By not helping out Landsbanki Guernsey depositors (which would require minimal financial risks, frankly), Guernsey is choosing to kill the goose who laid the golden eggs, its banking industry. No taxpayers’ money? Hang on. THE REASON WHY TAXES HAVE BEEN SO LOW IN GUERNSEY IS BECAUSE OF THE REVENUES OF ITS BANKING INDUSTRY (MORE THAN £1BN FOR THE 2002-2007 PERIOD), AND DEPOSITORS’ MONEY IN PARTICULAR. Looking at it that way, putting at risk £0m – £20m, say, to rescue depositors and salvage the island’s reputation, and hence the hope of low future taxes, rather looks like a no brainer.
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A country which is unable to look after people’s money does not deserve to collect unsuspecting depositors’ money and, for the public good, should be blacklisted. The black list is very short and easy to remember: Guernsey and (possibly) the Isle of Man.
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DANIEL:-
I will try to make answer to the points that you made about my post.
1) It is common knowledge that a great number of depositors were originally with Cheshire Guernsey and had been directed there by the parent company in the U.K. because they were not allowed to retain their accounts in the U.K. because of the U.K. banks making an unjustified ruling that non U.K. residents should not maintain mainland U.K. accounts.
2) So far as I know the interest rates paid were if anything very little more than Landsbanki’s competitors were paying.
3) The failure of the GFSC to actively respond to the known (To Them) the problems in the Icelandic Banking System, apparently a fact very well known in general financial circles.
4) Our ultimate aim is for the return of all members of the LGDAG and the G20 Action Groups 100% of our stolen savings, if we have to wield pressure via the G20 Conference on the States of Guernsey, so be it, they have NOT listened to us, they could have handled this crisis very early on and come away with a grand P.R. result instead of the egg on their faces which they will likely have. The intransigence of Messrs.Trott and his Cadres have left us with no other choice than to seek the help and assistance of the G20 Delegates.
4) I hope this goes some way to replying to your post.
Should you think that I was hiding behind anonimity, my name is below, you may have seen it recently in the Guersey Press/Letters.
Thank you,
Barry Wild (Springbok)
Landsbanki G20 (expatriates) Action Group
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Reply to Paul.
You should address your remarks to the GFSC. They didn’t “see it coming 5 months earlier” and take the necessary action to protect savers. Guernsey continued to endorse Landsbanki right until the end.
If the collapse could have been seen “5 months earlier” why did not Guernsey put the Depositor Compensation Scheme into action then rather than after the collapse?
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I still say all is not lost for Guernsey, although it is only a couple of minutes to midnight. Sack Trott now. Immediately show that Guernsey is a serious financial centre by helping the 1600 savers who had their money stolen by Landsbanki. It would cost a few bob but it would be an excellent investment for Guernsey’s future.
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The landsbanki agitators are increasingly looking ridiculous.
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To say that 99% of the posters here have missed the point is an understatement. Your own private vendetta is a completely different issue. Your blinkered and misguided reasoning just undermines any sympathy people may have for your plight. Landsbanki did not collapse because of issues regarding transparency, tax information exchange or bank secrecy. Investors in many other countries were equally caught out. Using words like theft is simply ridiculous. The main reason that you have been treated less well SO FAR is due to the lack of a depositors’ compensation scheme – nothing to do with the issues that the G20 is looking at.
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I and so many others had trusted our hard earned savings to Cheshire, Guernsey, and Landsbanki, Gurernsey, and we have been sadly let down by Guernsey. These savings were for us and many others for our retirement and we have all been badly let down. Never will we trust Guernsey again.
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as a PS to my comment above, I believe that many islanders wish to be sympathetic to your plight and certainly sympathise with your difficulties dealing with our less than impressive policticians, but if you allow your “cause” to turn into a vitriolic attack on the island itself, such as lobbying the G20 to take action on a completely unrelated issue, then you will lose the support of those who ought to have some level of electoral influence over the politicians. Seeking to damage the legitimate business of the island will not alter the recovery of your money or mean that the past injustice that you feel has been done will have been addressed – it is pure petulant behaviour and it does you no favours.
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I cannot even imagine how distressing it must be to lose your hard earned savings through the collapse of a bank and, if it was me, I am sure I too would be seeking revenge and recompense in any way I could. I also think Guernsey’s Chief Minister has handled this with as much tact and discretion as an Islamic terrorist at a bar mitzvah.
However, I cannot help but feel that the campaign by the Landsbanki G20 (expatriates) Action Group is misguided. The collapse of Landsbanki was not caused by the people of Guernsey, or by the Guernsey banking system, or even by the Guernsey regulatory authorities. The collapse of Landsbanki was the direct result of the sudden and unexpected freezing of global inter-bank lending and the consequent lack of credit available to banks. Global credit dried up and Landsbanki went bust, as simple as that. No one saw it coming and every investor around the world lost money in the carnage that followed. Landsbanki’s collapse was perhaps the very worst manifestation of that economic disaster and absolutely devastating for investors, but it was not Guernsey’s fault that it happened.
Each Landsbanki depositor entered into a contract between themselves and that bank. The bank collapsed and failed to fulfil it’s part of that contract and that, surely, is where the legal fight must be made, not with the government of the place where the bank happened to be situated.
If I bought – say – an American car and the next day the brakes failed and it crashed, I would sue the American car maker, I would not look to the American government for compensation.
I am truly sorry for Landsbanki depositors but it is wrong to suggest that the people or even the government of Guernsey stole your money – no one has walked away with your cash in their pocket.
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CD’s account of the logic of mid-19th century capitalism is an accurate one. In the meantime, the rest of the world has developed techniques for making sure that ordinary people can put their money in the bank safely. Some of the jurisdictions have been a bit late with these. Guernsey has dithered for years, now introduces a wee deposit protection scheme, but does nothing to assist the repayment of the 1600 Landsbanki Guernsey depositors. The assistance refused would have taken the form of a Guernsey government guarantee for a loan to repay depositors, backed by assets that will take time to sell. All other Landsbanki depositors are receiving assistance of this or other kinds, to one extent or another. Can Guernsey really afford to be the odd man out? Just asking. It might be worth Guernsey people studying carefully the reactions of the Isle of Man to just the same banking crisis. Result: enhancement of the Isle of Man’s reputation as a financial jurisdiction, discredit to Guernsey’s. There, I hope that’s not too vitriolic.
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Does anyone feel sad that all the expat Landsbanki lot will never put money into Guernsey again? Stop whining about Gsy and try hitting the Icelandic Govt – why on earth should my tax money pay for your savings and not a school for the future generations – and please your money wasnt stolen – and if it was it wasnt Gsy that stole it! If you see a big fat juicy worm of a rate advertised for savings, and it sounds too good to be true – guess what – it probably is – hence why Landsbanki were offering a great right in the months before they collapsed – they were desperate for depositors – sadly they didnt get enought to keep them going. Live and learn people.
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CD , your points are a good one. However because of the unique role that banks play in economies it is essential to maintain a level of confidence in the commercial banks to prevent “runs” on those banks. This is why virtually all advanced economies have some level of deposit guarantee system implemented/backed up by their governments for retail depositors. Sadly Guernsey and Jersey don’t fall into this category.
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DANIEL,
You accuse savers of choosing Landsbanki Guernsey for high rates of interest. I have a spreadsheet I prepared on 3rd November 2007 regarding rates on offer at that time:
1) Landsbanki Guernsey 6.5% fixed for 3 years
2) Alliance & Leicester Isle of Man offshore 6.51%
3) Northern Rock offshore 6.4%
4) Derbyshire Offshore 6.85% fixed for 1 year
5) Anglo Irish Isle of Man 6.8% fixed for 1 year
6) Icesave 6.5% fixed for 3 years.
7) Derbyshire (onshore) 6.8% fixed for 1 year
8 ) Birmingham Midshires (onshore) 6.86% fixed for 1 year
As all ex-pats will tell you numbers 6, 7 & 8 were not even available to those of us who do not live in the UK.
As you can see, the rate offered by Landsbanki was in-line with the others – in fact it was actually lower than several of them! We chose Landsbanki Guernsey because we put our faith in Guernsey being a safe place for our savings – and we have now certainly been severely punished for making a disastrous choice. How wrong we were to trust in Guernsey!
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>>no one has walked away with your cash in their pocket.<<
Bjork is more culpible than any Guernsey tax payer. At least she carries an Icelandic passport.
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As a Guernsey man working in the finance industry, and also having lost a fair chunk of my savings due to the Landsbanki thing I feel I can see both points of this argument.
As a banking centre I think Guernsey is doomed. It all comes down to balance sheets – ours is poor. The states waste money like I have never seen before and I am bewildered at how they survive.
As a Finance Administration Centre Guernsey does excel – and you don’t need a hefty balance sheet to keep that going.
Now – as to my lost savings, yes I want my money back. I worked hard for it and do feel jipped that I have lost it. But I also remember I banked with an Icelandic bank. I also knew that Guernsey had no protection scheme so on both counts I made a risky choice – and I have been bitten for it. Iceland was looking bad before the real bite took hold, and again I knew this. If you didn’t then all I can say is ignorance is not a get out clause.
The Tax Haven issue is easily solved – drop taxes else where. If you charge a 90% tax rate then it stands to reason people will move their money. Why should I get 10% of what I work for? If everyone in the world had a standard tax rate of 20% I bet people would bank at home.
In relation to the states I do agree they are very weak, gutless and, in the main, clueless. We are run by a group of idiots – who have no business sense and no balls. As a saver losing savings I also agree that we have been treated very badly by the States – but I think this comes down to the weak people in charge.
Should Guernsey be Blacklisted? It depends what for. For being a banking centre we probably should. For anything else no.
Anyway – thats my two pence worth.
JC
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DANIEL & SDG
Now that Lesley has shown you proof that we were not fat cats, plutocrats chasing high interest, hopefully that issue will be now ‘Dead in the Water.
Our ranks are composed of retired and hard working people who were saving to do the same so as not to be a burden on any state whatsoever, we need our savings to pick up our lives that have been on hold for the past six months.
It seems that Landsbanki Guernsey’s rates were in line with their competitors.
We have made it very clear that we are not going away to die and leave this matter rest, our struggle will continue until all our fellow depositors/members get back 100% of their savings.
Hopefully we can now finally close the doors on ‘High Interest Rates” & “Investors/Investments” as I am afraid that line of augument it is getting very thin and rather boring.
Barry Wild
Coordinator
Landsbanki G20 (expatriates) Action Group
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If you are depositing money it is good common sense to check out a) the institution you are depositing with – how safe and secure are they and b) the jurisdiction with which you deposit – if they have the depositer protection scheme in place then fine deposit – if they dont you either choose to go else where – or you roll the dice and take the gamble. Some you win some you lose-sadly for landsbanki customers – you lost.
Should Gsy of had the scheme in place before they actually implemented it – probably the answer is yes – but it didnt – and they shouldnt be covered retrospectively.
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JC, if I’m poisoned by a tin of sprats bought in Guernsey, will you tell me to see the Venezuelan businessman who owns the store that sold me the sprats? Perhaps you and other islanders who want to dismiss the Landsbanki Guernsey problem out of hand will tell me what they think a financial jurisdiction is for, what its function should be. If it’s not for anything very much and banks in Guernsey should be allowed to do what they like, just say so, and if you’re right, the world will know not to bank in Guernsey. Have you watered your tomatoes, by the way? It’s going to be about the only way the island can earn any money if you succeed in discrediting your own financial sector.
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Brian McLean – not vitriolic at all (unlike many of the above posts from others) and a reasoned argument. It is certainly arguable that it is not in Guernsey’s best interests to take its strict line with the Landsbanki depositors, but I would say that if the States had decided to make the compensation scheme retrospective, that would have been a totally voluntary concession and so while there may be moral and PR reasons why it would have been good for it to have done so, I do not think that the above accusations are fair simply because it has chosen not to do so. Whatever the rights and wrongs of that issue, it has nothing to do with the G20 blacklist.
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Well, whilst I am sure those who lost money are incredibly upset and distressed, Guernsey has no obligation to pay anything.
When one goes on holiday, particularly to those with different cultural values, you adapt to them. You research whether you need to keep your head covered for example.
Now the same applies here. By choosing to invest your money in Guernsey, you accepted the legal framework of the Island which is very different from the UK. Those laws were put into place by our elected representatives, in exchange for the lower levels of taxation. If you want protection, you pay for it.
Now, as Guernsey never guaranteed your money, may I suggest pursuing this through the Icelandic courts? If they claimed your money was 100% safe then there may be money available from the executors of the bank. Or you could apply for compensation through the UK small claim courts if there was a physical bank in the UK you signed through.
However, insulting the people of Guernsey and threatening us is not going to work. ian (sic) wants the States to put forward 1% of Guernsey’s GDP to secure the bailout of the banks depositors. He claims this is a reasonable amount? Personally I would rather see this money spent on our own needs, rather than bailing people out who took a gamble and lost.
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SDG, sound advice. I’ll be sure to take it next time. I’m just an old fuddy-duddy for thinking that banks seldom if ever fail in Western Europe—you know, in my young day a bank deposit was a risk-free investment but without capital gain. Swings and roundabouts. Ah well, we’ll have to move with the times. Well away from places like Guernsey and Costa Rica, you think?
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This thread does seem to have been hijacked by the Landsbanki depositors.
Whilst aware of the argument that depositors should take responsibility for their own actions, I cannot avoid the uncomfortable feeling that there is some merit in their claims to being let down by “Guernsey”.
By Guernsey I mean the States for its feet dragging in the introduction of a depositor protection scheme and the GFSC for its singular reliance on the FSA and its ignoring of all the warnings about the Icelandic banks.
I cannot help feeling that the failure of the GFSC to understand the uselessness of letters of comfort, something that it only apreciated in its August 2008 consultation paper.
I also wonder if the GFSC could have been more proactive in its protecting of LG depositor funds.
I appreciate that the GFSC were complimented in the Foot review for its limiting of sums to be upstreamed.
I wonder if the GFSC had realised the precarious state of the Icelandic banks and not relied on the FSA if depositors funds could have been retained in Guernsey.
One of the comments of the Chief Minister to the Commons Select committee was that banks did not have an appetite to finance any protection. Hardly an adequate excuse not to do what is right.
Given the tax benefit the banks are enjoying as a result of Zero 10 it does seem to be the uncharitable for the banks not to fund an ex gratia scheme for the LG depositors.
It is so easy to say to the LG depositors “you were the masters of your own destiny”.
Sadly, I feel that the States and GFSC, by their inaction, ensured that the financial risks of the depositors were significantly increased, to the extent that some recompense should be made to the LG depositors.
Would a more on the ball and alert regulator, not blinded by its complete faith in the FSA, have saved much of the lost savings of the LG depositors? I suspect the answer is yes.
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TL. I take your point, although depositor compensation schemes are normally financed by the banks trading in a jurisdiction, not by the taxpayers of that jurisdiction. Still, there would have been costs for Guernsey in administering the scheme, as there would for the “Guernsey should finance early partial repayment of depositors” suggestion put forward by the LG administrators. You’re right also in saying that depositor protection is not the only issue on which the G20 has had a bone to pick with Guernsey. If only, oh dear, if only Guernsey had been able to stand up and say, we may be a small jurisdiction but we do the job mighty well, so leave us alone. Then there would have been more tax revenues from the banking sector to pay for your schools. Still, you have other industries to fall back on. I could probably rustle up some reliable Hungarian students to wait at table or pick the Guernsey tomato harvest if there aren’t enough unemployed bank staff to go round.
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I dont mean to belittle the loss of the LBG depositors. I just dont see how their current tact of attacking guernsey is the right way to go about it as you are simply alienating the people of guernsey, who are fast losing any sympathy for your plight. If it were me i would be trying to rally the people of guernsey onto my side and urge them to contact their local deputies and make their support known and apply some real pressure on the states to act on their behalf – after all it is the electorate who vote in the states members and it is the electorates voice they ‘should’ be heeding.
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Who would trust Guernsey to look after their money now? The country that introduces a compensation scheme after the banks have collapsed……the country that will not even consider helping savers worldwide (the ONLY country)….need I say more??????
For what it would cost, given that ultimately more money is likley to be returned to Landsbanki savers, Guernsey could redeem itself in the eyes of the world. Otherwise it may as well say goodbye to any respect people have for it as a viable financial centre.
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What is lost if Guernsey is blacklisted? Nothing really, as there are plenty of better deals out there i.e. I.O.M. The most important matter is to get rid off Trott, Niven etc. as they fail badley the expectations of any islander and any depositor. They should support all depositors but they do nothing but waste moneyand time on useless journeys and tasks. Surprising that the islanders, deputies etc. have not been more active to solve this and get rid of them as their achievement is 0. Trott’s, Niven’s etc. lip services and inactivities do not bring anything to Guernsey, its residents as well as to the Landsbanki depositors. They are not worth representing anything.
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Sorry Landsbanki depositors my sympathy is waning fast in the face of such misdirected anger. Why aren’t you focussing your energies on those who are actually liable for your losses?
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SDG. Yes, we gave the friendly approach a good go as well, especially as it is in the interests of us and of the island for the issue to be resolved. But with your present administration it hasn’t been getting us anyway, so now we are taking a less pliable line. Nothing personal, of course, but we are concerned also that others should not fall into the trap of thinking that Guernsey is a normal healthy jurisdiction. CD. If you have any new ideas about where to direct our anger, I’d be grateful for one.
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Thank you, Stephen, for your support for LG depositors.
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Brian, you say that you want to warn others. The stable door may have been shut after LG had bolted, but it has now been shut and puts Guernsey depositors in exactly the same position as UK depositors from now on. By lobbying the G20 (if that is indeed happening) the action group is not helping others, it is muddying the water.
As to where the anger should be directed, look to Iceland. My understanding is that the money is there and will come out eventually from the administration, so it really is just a question of cashflow (or am I wrong on that point?).
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Lesley – Thankyou for providing the financial data above, please however note the following:
1) Landsbanki Guernsey – Subsidiary of an Icelandic Bank – Bankrupt
3) Northern Rock – Troubled financial institution – Capital injected by the UK government
4) Derbyshire – Share capital of Derbyshire purchased by Kaupthing Singer Freidlander (an Icelandic bank in Nov-07) Kaupthing subsequently bankrupt
6)Icesave – Icelandic Bank – Bankrupt
7)Derbyshire – Share capital of Derbyshire purchased by Kaupthing Singer Freidlander (an Icelandic bank in Nov-07) Kaupthing subsequently bankrupt
8)Birmingham Midshires – Part of the Lloyds Banking Group – Capital injected by the UK government (40% ownership)
Of the 8 rates quoted 6 are with financial institutions with connection to either the Icelandic banking sector or with financial institutions that have been bailed out by the government.
To reiterate my argument the high rates on offer at that time were representative of the risk of deposit. A risk that has been borne out in the bankrupcy of institutions 1, 3 and 6 above.
Spingbok, comments concerning the “High Rate of Interest” may be wearing you rather thin but it is a point that is well worth being made.
I wish you well in the recovery of your lost funds however do not seek to do this by ruining the reputation of Guernsey as a finance sector and seeking to link this issue (Depositors protection scheme) with the hot topic of Tax Havens.
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TL, CD, SDG, D Le Page, Stephen John, JC
You cannot seem to understand that this campaign is nothing personal against the good people of Guernsey.
It has resulted from astonishment at the fact that Guernsey is the only country in the world that has steadfastly refused to help stricken savers.
Even the Isle of Man has part-funded a Scheme of Arrangement, contributing £150m from its coffers.
The campaign will now step up a gear by petitioning the OECD Secretariat to put pressure on the Government of Guernsey to do what is right – even if it has to borrow the money from Mr Darling.
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I do not understand why the Guernsey residents are so patient with their elected officials from whom they receive no support for their loss in LBG. Many of them lost their hard earned savings and the felt support, beside useless lip service from Trott, Niven and others,is nothing. When can they expect the other 70% of their savings? Is this what they voted into the government to represent them? Are there no others with more guts, backbone, comittment and moral who can do better for their residents than these? The administrators of LBG made good proposals which fell on the deaf ears of the government> Where are the deputies and their actions for the residents who elected them?
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Why is it that the Guernsey government cannot stand up to its responsibilities?.It had NO deposit guarantee scheme in place, about which it was amazingly coy,when I placed money with Landsbanki this was Never mentioned. When they did introduce this legislation it was Not retrospective.Thus we were left totally abandoned,with no compensation from Guernsey whatsoever-they are very keen to take your money, but not give it back!! even though they can well afford it.
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I was just about to transfer my money from HSBC Hong Kong to Guernsey when the news of the Landsbanki rip-off broke. Although the bank I had in mind was not Landsbanki, I have to say that the way Guernsey reacted gave me pause. I followed events and decided that Guernsey was not the place for my hard-earned dinero. I suggest that you revitalize your fishing industry and kick your FSA up the posterior!
Thank God I found an honest bank in Ireland where my money is safe!
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I have been alerted to this discussion by the LGDAG and my contribution is therefore probably only preaching to the converted, however some of the anti-LGDAG comments need to be refuted. Paul says that depositors should investigate where they are putting their savings. I agree that there had been media comments about the Icelandic Banks’ creditworthiness but this didn’t seem to stop the sophisticated investment departments of numerous Uk councils and other well respected bodies (e.g the Metropolitan Police and Oxford University) from placing some of their funds with them – in some instances only three days before the collapse. To blame ordinary and financially unsophisticated people for their own undoing is like blaming a passenger for their own death by taking a seat on a plane that crashes. Furthermore, whilst it is accepted that Guernsey does not have a legal responsibility to compensate depositors neither did the Uk government have to compensate those Icesave depositors who lost more than the £50,000 limit. The point is that they repaid 100% of all retail deposits. A government’s duty is to act responsibly and do the right thing and Guernsey’s Government has failed in its duty to protect its depositors. It now transpires that it may be because it simply cannot afford to. Why this should be news to the Guernsey politicians demonstrates how unaware of the wider world they really are. I read an article in the Jersey Evening Post three years ago when the GST issue was being debated and suggesting that Guernsey should follow suit. However, Guernsey Ministers were adamant that they could not foresee any funding shortfall. I digress – let me re-iterate to those people who feel that Guernsey is not responsible for the LG depositors. LG was a Guernsey Registered company, therefore it is within Guernsey’s constitutional jurisdiction, nobody elses. All Icelandic depositors and UK depositors in Icesave have had their savings repaid by their respective Governments. The Guernsey Government’s response to the LG crisis is shameful and the regime’s moral standards are therefore highly pertinent to the question of whether Guernsey should be included on or excluded from the G20 blacklist.
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There is a lot of woolly thinking above. No bank, however solvent, can repay ALL its depositors the WHOLE of their deposit on demand, yet this is what he LDG seems to expect.
LBG had three types of asset, cash deposits with other banks (which have been realised and paid to depositors), secured loans (which, unless they can be sold, will take some years to realise but will earn interest in the meantime) and loans to other Group companies Which are probably worth very little.
On the other side of the Balance sheet it had depositors balances and share capital and reserves. The latter were sizeable and were not far short of the amounts loaned to Group companies. If the group companies balances prove worthless then the eventual shortfall will be in the region of 10% – 20% of deposits but it will take some years before this is known.
One further point that never seems to have been raised – should the Directors of LBG be sued for misfeasance in sending large sums of money to head office a day or so before the Administrators took over (which I seem to remember was the case)
I could not care less what the thieving Brown does unless he repays me the money he stole from my pension fund and the losses by my investments due to his dire mismanagement of the UK economy. But as a result I feel disinclined to agree that my taxes should be used to pay for the losses of LBG depositors, particularly non-Guernsey folk.
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A little note to Paul, and those who believe that it was the failed depositors fault to leave their money with Landsbanki:
You’re wrong arguing that all depositors in Landsbanki could and should have withdrawn their funds before the bank went into administration. In practice this cannot happen unless by some miracle all depositors were to take all the money out at the same time, and the money were to flow out of the Landsbanki’s depository into the accounts in other banks by air. This, you must agree, is a fantasy. Depositors’ funds could have been transferred only by the bank’s officials. These officials would have had to declare the bank insolvent at the point of their receiving enough withdrawal requests that breached insolvency rules – well before all depositors were to get hold of their money. Trust me, I know, I worked in a bank. It was therefore inevitable that some Landsbanki’s depositors would be left on the bank’s books. What wasn’t inevitable was to let the bank’s funding to sink to the point where it had to go into administration. This was the duty of the regulatory authorities. They failed in their supervisory capacity of Landsbanki, and they failed to ensure that there was a compensation scheme if the bank folded up and depositors lost their savings. Other jurisdictions suffered similar failures, but have done more to compensate depositors eg Britain, Isle of Man, Iceland. It is ONLY Guernsey that seems to have washed their hands out of the problem.
You are free to hold any view you like, but be careful. Your bank is currently likely to be under pressure, too. They all are because of the nature of banking – accepting deposits on a short term basis, but lending long. If you were to lose your savings (I hope you will not) you may know how we feel.
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It seems that Mr Lyndon Trott is doing everything he can to ensure that he enters the annals of the Guernsey’s financial industry as the only Chief Minister under whose governance ordinary people lost their life savings. This must be the first in the island’s proud history. Congratulations, sir.
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my money {the only savings i had} £20,000 was in cheshire building society or landsbanki. my husband and i owned a small place in spain which we were going to move to but plans dont always work out and my husband died, i had to sell my spanish flat and after repaying my mortgage put the rest in guernsey on my spanish notary’s advice. i always thought that banks were completely safe, unlike stocks and shares, losing my money has completely broken my heart, i cant even help my grndchildren with their education. i know most of my fellow depositors are a lot more eloquent than me, but i really feel that guernsey should take some part in the responsibility for all his disappointment, i am still in complete shock about having no money left and i think guernsey shoud be blaklisted.
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Well said CD. These people need to get a dose of healthy realism for a change rather than wingeing on about the States not running in with lots of tax payers money and bailing out their own stupidity
There isn’t a bank anywhere in the world that has bailed out by the taxpayers of another country. The Irish looked after their own as did the British and as did all other countries that needed to
The only ones to stump up some cash is the Isle of man and that’s because when they decided to increase the coverage of their Depositors’ Compensation Scheme the Banks wouldn’t agree to cover it as they hadn’t been consulted – so they had to put in taxpayers money
The answer to your question Mr McLean is Iceland pure and simple
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I as a taxpayer DO NOT think that the States should spend one penny on a ‘Bail-Out’ to Landsbanki depositors.
Depositors (motivated by greed) put their cash in a Mickey Mouse bank (offering very high interest rates) that went down – so what! Using this rational the States should guarantee every single product that’s ever sold in the island. What next, should they also underwrite the warranty on my car (a Yugo saloon) – because Yugo have now gone out of business?
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The Guernsey States supine & pusillanimous response to the plight of the Landsbanki Depositors serves to remind us that this august institution are comprised of inert faux politicians who revel in the prestige, rather than the responsibility, of office. Suspicious glances can also be cast into the role of the GFSC & the intrinsic value of their contribution in ensuring that the financial institutions are operating on the island within best governance protocols. This episode must surely have negative repercussions into the credibility of Guernsey as a financial centre.
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STEVE:-
This so called Mickey Mouse Bank was authorised by your very own regulator the Guernsey Financial Services Commission and they don’t operate from Disneyland, but there again I wonder about that maybe it should be ‘Cloud Cuckoo Land, they also allowed our bank Cheshire Guernsey to be sold to Mickey and Minnie.
SPRINGBOK
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Mark Ashbey
f you read my post of March 27, 2009 at 3:18 pm and earlier posts you will see that whilst \I believe the LG depositors must accept some of the responsibility, I clearly qualify that view with criticism of re the lack of a depositor protection scheme and more importantly the failures of the GFSC.
You will also see that I have long advocated an ex gratia, bank funded scheme, to deal with the LG problem. There is no need for any taxpayer funds to be used.
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Whilst I’ve got some sympathy for Landsbanki savers, why should ordinary Guernsey taxpayers foot the bill for the downfall of an ICELANDIC bank?
From reading the many postings on this website it appears that most of the Landsbanki savers don’t live in Guernsey and in many cases don’t even contribute to our local economy!
We have already bailed out the finance industry to the tune of millions through the zero-10 scheme, its about time finance took some responsibility for their actions.
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Well going through that lot I come to the conclusion that it is Trott who is the big bad wolf, and rightly so; a pseudo politician.
But it’s like hot air- soon disperses when let out.
For goodness sake get rid of him now.
The to the ones who say Guernsey gained; Oh yes, then you didn’t know Guernsey before the Vultures came; we had no dead meat; people were proud to do a days work, because we had a beautiful Island
Now look around, Admiralty Park like ships. all at sea. ugly buildings.
And many more, the quaint little town of St P.P. and St Sampson was a joy, now it’s a ghetto unsafe to even walk at night time.
So GAIN? where? Peace of mind- GONE.
get rid of them and let’s start again, starting with complete freedom from the UK.
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I had money in Northern Rock Guernsey and Landsbanki Guerney. The former was saved by the British tax payer and the second, well you know what has happened. The question I pose to all, is why would I want to continue to save in Guernsey? What is a financial centre, surely not a place where the governemnt action to protect private savers has been so out of line with all other juridictions. I simply cannot think why I would want to save in Guerney any more.
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There seems to be little understanding in Guernsey, among its population and politicians, that a key idea underpinning a successful banking centre is TRUST. No Trust = No Banking. No Banking = Higher taxes or Fewer Schools. What taxpayers do not pay now to salvage the island’s reputation, they will pay in the years to come at an extortionate interest, ie they will end up paying a multiple of the likely £0- £20m needed now to sort out this mess.
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TL
You said: “The stable door may have been shut after LG had bolted, but it has now been shut and puts Guernsey depositors in exactly the same position as UK depositors from now on.”
Absolutely not the case. In the UK we can have confidence that Mr Darling will in effect rescue all savers for the totality of their deposits.
In Gsy you are only covered up to £50,000, reduced pro rata if the total value of eligible deposits exceeds £100m.
Scarborough CI Gsy and Skipton Gsy, for instance, will have combined eligible deposits of £400m when they merge – so you’ll only get £12,500 of your £50,000 back if it goes bust.
If it is not allowed to go bust, it is because of the intervention of Mr Darling – not Messrs Trott and Parkinson – to rescue the parent company.
Savers of any bank that has to rely solely on Guernsey – without being able to fall back on the UK – is in a precarious position indeed.
Mark
“There isn’t a bank anywhere in the world that has bailed out by the taxpayers of another country.”
Expat Cheshire / LG savers paid tax in Gsy through the provisions savings directive.
Compare Gsy with the UK, the Netherlands, Iceland (yes, even Iceland guaranteed local deposits), the Isle of Man which is spending £150m of public funds to help savers
- and even the tiny Faroe Islands with a smaller population than Gsy that stumped up $65m to help.
Steve
“Depositors (motivated by greed) put their cash in a Mickey Mouse bank (offering very high interest rates) that went down – so what!”
Also wrong: most actually deposited in the Cheshire, a rock-solid UK building society at the time.
Is it their fault that the Gsy authorities permitted the sale of their savings were sold to an Icelandic bank that they’d never heard of?
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MARK. LG was a bank registered in Guernsey owned by a limited company registered in Guernsey. Iceland as a jurisdiction doesn’t come into it. Of course some of the money owing to LG is owed by Icelandic companies (fellow LG subsidiaries and others) and along with the other sums owing, these debts are being pursued by the administrators. That’s not the point. I suppose you must be against depositor protection schemes as such, whatever the jurisdiction. That puts you in a very small minority. You and some other islanders on this thread are making it sound as if the £81 million required to repay the depositors of LG (a third of them Guernsey people) would have to come out of Guernsey taxpayers’ pockets. If you offset that sum against the net gain for Guernsey in tax revenues from the banking sector over the last five years, you will find the Guernsey taxpayers have done quite nicely. And if Guernsey hadn’t stepped out of line by refusing to countenance any assistance to the LG depositors or administrators, Guernsey would have continued to do quite nicely out of the banking sector in the years to come. That’s a larger-scale tragedy even than our losses as LG depositors. Then, as I’ve tried to explain in earlier posts, the cost to the taxpayer of the two forms of public assistance from Guernsey being suggested are marginal. Depositor protection schemes as such are financed by the banking sector, not the government, but there is a loss of tax revenue to the government because the banking sector’s profits will be lower in years in which depositors have to be compensated. The Guernsey government wilfully and arbitrarily refused to impose a depositor protection scheme that would be retrospective and cover the LG depositors. Are you sure you haven’t got a corruption problem on your island? Just asking. The other scheme mooted, by the administrators, is that Guernsey should back a loan to be raised by the administrators to pay back to the LG depositors a tranche of money owed to them earlier than would otherwise be possible. There would have been a risk to the Guernsey coffers, which Guernsey could have insured against, again a not too considerable cost to the taxpayer. But no, said the Guernsey government. Funny you should mention Ireland. I had been thinking of putting the money I eventually placed in LG in an Irish building society, which has since gone into administration as well. The interest rate was similar. If I’d gone for the Irish building society, I would have been fully compensated. Silly me. STEVE: I see you and I are kindred spirits, always ready to do the wrong thing for the right reasons, in our innocence and ignorance. My condolences on owning a Yugo saloon. I hope you can replace it one day with something a little bit more reliable. INSHORE FISHING: Yes, this is something that Guernsey can expand, based on local expertise. I would like personally to offer a free sou’wester to any former bank employee who sets up as an inshore fisherman rather than going on the dole. But only after I’ve had my LG deposit back, of course.
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To Steve and all those that use the argument of analogy, analogy being the poorest form of argument and used when a valid argument with valid premises cannot be constructed; where is the similarity between saving with a Guernsey registered bank who had the confidence of, was lauded and regulated by the GFSC, and buying a Yugo car. Unless of course the GFSC told you what a great car it was and it would never break down. Still now you know how to use poor argument after little research and reading only the big print of the Government propaganda you are prime material for Deputy and the Policy Council.
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Note to Steve…if you bank with Lloyds, RBS, HBOS or Barclays – you too would have lost your savings without the assistance of Uk taxpayers. So you’re ok Jack living in an offshore tax haven with banking facilities supported by onshore taxpayers! Perhaps you should follow the news a bit more closely or do a bit more research – the entire banking system was hours from collapse and it was the actions of a responsible Government that rescued it. Also its about time your lame Government finally started funding a sewage treatment plant – or do you object to your taxes being spent in this manner too? How many tourists realise that all their waste is pumped into the ocean? But thats another Guernsey scandal.
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If, as Steve claims, Landsbanki was a Mickey Mouse bank then why was it allowed to operate by the GFSC? Perhaps the answer is that Guernsey is a Mickey Mouse financial centre!
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Mark,
I think you will find that Northern Rock Guernsey and Bradford & Bingley Guernsey were bailed out by the taxpayers of another country, namely the United Kingdom. The Irish have also said they will support their banks located in other ccountries. Please get you facts right.
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Mark: “There isn’t a bank anywhere in the world that has bailed out by the taxpayers of another country.”
What are you talking about? Landsbanki GUERNSEY is a GUERNSEY registered company, incorporated in GUERNSEY. It isn’t a bank of “another country”.
But, as you mention it, RBS Guernsey, HBOS Guernsey, Lloyds Guernsey and Northern Rock Guernsey are also Guernsey registered companies, incorporated in Guernsey, and they’ve been bailed out by the taxpayers of another country. Ah, you’re not complaining about that, are you? :-)
I hope all our local depositors in those banks have sent their gratitude to the UK taxpayers for having saved them from their “stupidity” in depositing in those failed banks.
I suspect we’d be seeing a very different set of comments here if the UK had decided to only “look after their own”, just saved the UK branches of those banks, and let the non-UK (inc. Guernsey) subsidiaries go down the tubes….
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Wow Giovanni, big words. If I understood them I’d probably disagree with you.
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Steve – if the GFSC guaranteed your Yugo, then go ahead and ask for compensation!
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Sorry Mark, but you’ve got it exactly the wrong way round.
There isn’t a country in the world that hasn’t acted to protect savers in their local subsidiaries of the Icelandic banks: except Guernsey.
The UK, Germany, Holland, Austria, Sweden, Norway, Finland, just to name a few, have all stepped in to take over the retail liabilities of their local Landsbanki and/or Kaupthing operations in order to protect the savers in them.
That is what “looking after your own” means: protecting the savers in banks that are registered in, regulated in, and operating in your jurisdiction.
Guernsey should do the same as the rest of the world has.
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GE – no government is obliged to have a depositors’ protection scheme and its presence or absence would never be something that would be mentioned by a bank to a prospective depositor. I would be very surprised if you had any direct dealings at all with the Guernsey government when you made your deposit. Guernsey was not coy about the absence of the scheme, it simply did not have one. If you had asked a direct question (or internet search) you would have had a clear answer. As for it not being retrospective, as far as I know every DPS in the world is funded by the banks and not the state, as part of the cost of being able to reassure depositors. The banks would never agree to make their funding retrospective and so the only way for the DPS to be made retrospective would be for the Guernsey States to use taxpayers’ money to bail you out. As you have seen from a few of the posts here, that is not something that many taxpayers would have liked to have seen. The States owes duties to its taxpayers at least as much as to the persons that the island’s regulated businesses attract to the island. As for your last point, Guernsey did not take your money, LG did. LG’s parent company went bust through no fault of Guernsey. As to whether “they” can afford it, I assume that you are still talking about Guernsey. As with many countries “we” also have a budgetary hole which tax payers are concerned about.
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Mark Ashbey – although I am yet to be convinced that what you think is “doing what is right” is actually anything of the sort, I do of course support your right to campaign on that issue. That campaign is not an attack on we islanders or our island.
However, I was originally prompted to respond to the above posts because it appeared that the campaign to recover LG deposits was being held up as a reason why Guernsey should be on the G20 blacklist. The G20 blacklist has nothing to do with security of bank deposits, or even the relative investor confidence in regulation from one jurisdiction to the next. The G20 blacklist is about tax havens – places which operate systems that allow persons from one jurisdiction to hide their assets and income in another jurisdiction in order to evade tax in their home country. That does not apply to Guernsey and whatever happening with LG has nothing to do with that issue. By extending your argument to that issue, you are simply attacking Guernsey for the sake of it because you feel you have been badly treated on a different matter.
As an aside, if we were to assume for a moment that there was a link between the LG depositors and the tax haven blacklist, that would lead to the conclusion that the off-island depositors were using a Guernsey bank in order to engage in tax evasion. I assume that is not what you are saying? No, didn’t think so.
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Recent email from Deputy Dawg – sorry Deputy Jones.
“PLEASE STAND BY FOR ANOTHER IMPORTANT ANOUNCMENT FROM 41 STATES DEPUTIES. WE WHO REPRESENT OUR PEOPLE ARE NOT GOING TO HAND OVER TAXPAYERS MONEY TO LANDSBANKIE DEPOSITORS.”
Forget for a moment the spelling mistakes and the bad grammar – this person managed to garner votes from the good people of Guernsey, how?
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When the banks go and we finally go back to being an honest, real economy – then all of those flashy ‘brass & marble’ buildings will make smashing apartment blocks. They could even be converted into swanky hotels and the island can return to tourism as its core business. Now that the pound is worthless we can attract all of the british tourists that can’t afford europe anymore – sort of like the costa del sol but with a french flavour (côte du soleil).
The bank at the bottom of the grange can be turned back into a fish and chip shop. Revitalise the bathing pools area, bring back the fermain ferry. Eco tours of sark (if the barclays allow it)
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TL
All EU governments are required by EU law to implement deposit protection schemes, as are EEA governments.
Gsy, though not in either the EU or EEA was advised to do so in the Edwards Report in 1998 and even then it took TEN YEARS to do so, and only did so when LG imploded.
To add insult to injury it did not even mention LG in its billet d’etat – only Northern Rock! Gsy was in denial.
Cheshire / LG savers need to lobby the G20, the OECD etc to put maximum pressure on Gsy to emulate the Isle of Man and do what is right.
There may not be a direct connection to banking but there certainly is to the reputation of a jurisdiction.
“…through no fault of Guernsey”? The GFSC permitted the sale of safe Cheshire Gsy savings to an Icelandic bank that Cheshire savers had never heard of!
Need I say more.
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STAND BY FOR A REALLY IMPORTANT MESSAGE FROM THE Landsbanki G20 (Expatriates) Action Group.
Will Deputy Dawg never realise that we DO NOT want the hard working people of Guernsey’s tax money. All we want is our own and would have received it long ago except for the intransigence of Mr.Trott & Co., who have obstructed every real attempt for us to do so.
By the way this is NOT the really important message, that comes just a little later to-day.
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Mark Ashbey – I stand corrected about the requirements for EU countries. I also totally agree that for reputational reasons the Guernsey States should have handled this very differently.
What I still take issue with is (a) the suggestion that Guernsey has stolen the money and (b) the suggestion that the LG20(E)AG is asking for Guernsey to be put on a blacklist for an unrelated issue.
Springbok – The Guernsey States does not have your money and it cannot give it to you, only the LG administrators can do that. Please could you explain how the States would pay depositors without using taxpayers’ money? I have seen it said many times that the Action Group does not want taxpayers’ money but every solution comes back to using taxpayers’ money in some form. I really do want to understand this.
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TL
Gsy has already been blacklisted by many international depositors and even by Gsy locals, who are moving their savings to the Isle of Man.
The campaign is the bring the inaction of Gsy to the attention of the G20, OECD etc to ratchet up the pressure.
The Administrator came up with two options to repay investors. It would involve either a ‘phantom’ deposit protection scheme of a Scheme of Arrangement.
These would be part-funded by the banks, via a loan from the UK and a miniscule portion of the £1.5bn that Gsy has reaped in revenue from its finance centre over the past five years.
Gsy cannot just take and not give anything back. It must take action if it wants to salvage the reputation of its finance centre, which is what keeps its economy afloat.
Remember that depositor liabilities are only one-tenth that in the Isle of Man and look how positively the latter has tackled the problem.
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Mark – Thanks for the reply. I understand your wish to exert extra pressure but I go back to one of my first comments in the huge thread – that attacking Guernsey by lobbying the G20 on the tax haven issue will just lose you friends in Guernsey.
Your reply suggests that taxpayers money will be used. I am not saying that it should not be, just that there have been many claims that the LG depositors are not asking for taxpayers money whereas I think they are. If we could just be clear that the LG depositors are asking for taxpayers money to be used we could get on to a simple debate of whether that is right (as in the UK, Isle of Man, etc). I feel that the claim that the LG depositors’ claims would be cost free is clouding the issue.
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I’ve just heard that I’ve lost all my money in the failiure of Sandisbanki in Angola.
I too am lobbying the G20 for my money that was stolen by the States of Guernsey.
I fully expect the Government of Chile to recompense me or I’m going to get really cross.
AND TYPE IN UPPER CASE. So there.
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Mr Ashbey
Will you please be specific about the “£1.5bn that Gsy has reaped in revenue from its finance centre over the past five years”
What are the constituents of this figure and more importantly, how is it relevant?
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I used to feel sorry for the Landsbanki investors, but after seeing the rubbish posted on this forum I have little sympathy for the money lost by the posters.
It’s time to realise we Guernsey tax payers do not want to bail you out. Why should we? You made the decision to chase rates in an Icelandic bank that was rumoured to be in trouble for a long time. Did you not wonder why their rates were so attractive?
Guernsey makes very little from deposit taking (we don’t impose a witholding tax, but I guess you all knew that….) It’s not an area of major income for the island.
And do you think the Private Banks, Funds and Captives that do major business over here are really worried about an overseas lobby group that fails to grasp even the basics of how international banking works? I think they have far more pressing issues in these current times.
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>>this person managed to garner votes from the good people of Guernsey, how?<<
Pretending to be from Guernsey and for Guernsey and then a year later finding out Housing and therefore Guernsey leaks incomers into the island like a sponge.
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Greg; Abbey National in the UK were offering a higher rate than what I was getting from LG and with a £33,000 compensation limit. Trouble is as I did not live in England they would not let me open an account. This goes for other UK societies/banks. I stuck with LG after it took over Cheshire because I believed the Banking/GFSC mantra that stated there was no need for a local protection scheme as Guernsey was too well regulated, which turned out to be a lie. What would have cost more? For government to sit down and find a solution to the scandal or dig in as they have done and fight costly litigation as happened with Barnett Christie. The 1st would have been the logical, cheaper option.
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The story has been told many times over-an unaccountable dereliction of duty by the Guernsey authorities to do the honourable thing and acknowledge that if a bank in its territory fails that it should step in and at least assist investors if it has any credibility as a financial centre and is to be trusted in the future by savers and depositors. Interestingly the UK has even given an additional time concession to Icesave customers who may now invest in ISAs later than the tax year end such is its sympathy with the plight of failed Icelandic account depositors- Guernsey simply pretends that it is somebody else’s problem- it is – my 81 year old mothers who had her life savings in there- but it will become Guernseys problem.
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Mr Ashby, why would anyone want to move their deposits to the Isle of Man? It’s fairly common knowledge that their depositor scheme is chronically underfunded.
I’m looking forward to seeing your figures showing the £1.5bio revenue the States of Guernsey have received from the Finance Industry!
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Sorry Mr Trott… But the more I listen to you the more you remind be of Comical Alie press officer in Iraq durring Gulf war.
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Janson, I’m not aware of any “mantra” from the GFSC stating we didn’t need a depositor protection scheme because our regulation was so good.
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The problem is that the Offshore Financial Centres (is that the current acceptable term?) have bank deposits which dwarf their GDPs by some huge multiple. Consequently when things go wrong there is little chance of a bail out from the local government reserves if nothing has been set aside or no bank levy based scheme. So if that were the case then the likes of the GFSC, to compensate, should have been applying much stricter capital adequacy requirements in their bank regulation than say the UK. But we don’t do stricter regulation of that sort as we wouldn’t get so much business!
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Greg
That figure was provided to the DAG by HM Treasury. HMT says Gsy has profited greatly from its many years as a successful finance centre.
It can’t be all take and no give.
And how many times do I have to remind readers of this forum that savers deposited their savings in the Cheshire Gsy – a UK building society – not an Icelandic bank.
It was the GFSC that permitted the sale of these safe savings to an Icelandic bank.
Building society savings in the UK have only been permitted by the FSA to be sold to other UK building societies or banks. Same has just happened with the Dunfermline.
But you are right: savers should have run a mile instead of trusting the GFSC’s judgement.
Savers will have felt very uneasy the moment they discovered their savings were being sold to an Icelandic bank they’d never heard of.
But the Cheshire and the GFSC did their utmost to reassure savers that everything was fine.
You’re right: they should have all moved their accounts elsewhere in August 2006.
But the Gsy authorities persuaded savers to stay put and are now facing the consequences.
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Mark, I’m looking forward to seeing the letter from the GFSC to all Cheshire customers persuading them to stay with Landsbanki.
And I would like to see HMT’s figures that you were given. Can you post them on here?
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Greg
Details of our meeting with HMT are posted on our secure website. Only registered depositors who are members of the DAG can view those confidential documents.
However, you should be able to obtain similar information from the Gsy authorities – although possibly not in as much detail.
The GFSC gave the Cheshire / LG its stamp of approval by its authorisation, which appeared at the bottom of all letters from the Cheshire Gsy and LG Ltd.
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Mr Revere
I believe yor view “then the likes of the GFSC, to compensate, should have been applying much stricter capital adequacy requirements in their bank regulation than say the UK” was certainly appropriate in mid 2008.
Sadly, the GFSC further compounded their failure by relying on the FSA for information, and ignoring the facts that looked them in the face.
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GREG: Thank you for your past sympathy for us. Thank you also for sparing your time to put your views. The answers to your questions can be found in earlier posts. I agree that the Private Banks, Funds and Captives doing major business in Guernsey don’t have to worry. My knowledge of international banking tells me that they can easily move to another jurisdiction if they feel yours is not run properly. So it’s “caveat venditor” as far as you and they are concerned.
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No matter what arguments the Guernsey Government and people, who luckily for them did not get caught out this time, may come up with, the facts are: British citizens are prevented from having onshore accounts in Britain by banks themselves; Landsbanki gave assurances when they took over from Cheshire Guernsey that meant many of us stayed with them and took advantage of longterm bonds for income purposes; funds were transferred very suddenly to onshore banks leaving Landsbanki and us high and dry; the British government invoked anti-terrorism laws against innocent depositors and has since allowed our funds to be used to repay others, of whom many may not be British; the British Government, while telling its citizens to have private pensions has encouraged profligacy and undermined the ethos of saving. Is there any wonder GB Sterling is now at such a low? Why would the government of Guernsey which has no apparent desire to help its own citizens be any better?
It is a weak State and is whistling in the dark if it thinks that its actions have gone unnoticed. States and individuals should certainly think again before trusting Guernsey with their funds. SusanD
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Mark- I don’t feel that having “Authorised and Regulated by the GFSC” at the bottom of a letter is quite the same as saying the “Gsy Authorities persuaded savers to stay put”!
Brian- In this day and age, do you really believe that the major finance operations in Guernsey will move jurisdictions becuase they are worried about how small retail investors are treated?
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“the £1.5bn that Gsy has reaped in revenue from its finance centre over the past five years”
This quote is based on figures provided by HM Treasury!!!! It is an incontrovertible fact that there are Lies, Damm Lies and Treasury statistics.
As the annual revenue of the States for the last five years, from ALL sources, is between £320M and £360m per annum the contribution, if HMT is to be believed, of the non-financial sector is between zilch and miniscule.
In any event the bulk of the income comes from tax on employees and, believe it or not, fewer than half work in the finance sector.
But, Heigh, Ho, it makes a good sound bite and any lie, if repeated suficiently often, become the received truth. Such is the power of the media.
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TL – I hope I understand your terminology correctly in that you are referring to “taxpayers money” being “used”. The LGDAG have never wished for any “handout” of these funds but have
always known that any effort by the Guernsey Govt to “buy back their reputation” by utilising available funds to reduce the suffering of many elderly depositors would mean the temporary deployment of such funds. Obviously any expenditure now would be returned by the administrators in due course, it only needs an 80% approx eventual recovery of total assets to ensure that all depositors (incl the States of Guernsey) would be reimbursed in full.
Greg – I add my thanks to Brian MacLean’s for you taking time in your busy working day to add your comments. And to your employers.
If you regard the IOM scheme as underfunded you should consider an earlier post which notes that should Skipton/Scarborough Gsy with deposits of approx 400 million go belly up, our vaunted 50,000 compensation would be limited to 12500 due to the 100m cap.
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Does anyone think of blaming Landsbanki for losing their money? They operate as a whole group, not as a single Guernsey entity. I would even go as far as to suggest that the Guernsey branch may not have even had anything to do with the group’s failure. So why should the Guernsey government bail them out?
When putting your money with a bank you are investing and gambling (admittedly this is probably the safest kind of gambling), and with that you take the risk of losing the money! Don’t put all your eggs in one basket!
If you want security, you play the taxes that goes with that, such as in the UK. If you want to pay less tax, you take the risk.
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First of all, let me say I do have sympathy for the Landsbanki depositors who have lost money, but the writing was on the wall months before Landsbanki Guernsey collapsed. I had money in Landsbanki, and understood that high rates = higher risk, so I kept myself informed by reading the finance section of Sunday papers and regularly checking credit ratings on the internet. After reading one article which ended “you have been warned” I decided to take my money out 5 months before the collapse, losing interest in the process as I chose not to give notice.
This was preferable to losing my capital, and the same information was available to all Landsbanki Guernsey depositors. I take the view that you cannot rely on anyone else, but have to look after yourself. Just because a regulator exists does not mean that they are always going to be right or will always be able to protect you.
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Greg
If you look at the Foot review of the GFSC handling of the Landsbanki collapse you will see at para 57.
“So far as existing customers of Cheshire Guernsey Ltd (CGL) were concerned, they were written to individually by CGL on 7th August 2006; the Society gave a positive but factually accurate description of the new owner. (It is relevant that, at this time, the Cheshire Building Society was not rated ; had it been rated, it would have been unlikely to have commanded as high a rating as Landsbanki had at that point.) Landsbanki also wrote to depositors on 25th September 2006″
No reference of any letter from GFSC to Cheshire customers.
However, there is an interesting paragraph just before this, It says
” GFSC also sought and obtained a “letter of comfort” from Landsbanki in respect of LGL. Such a letter is not, in our view, a requirement before a licence is granted. But it allows the host supervisor to give the subsidiary more operational freedom than would otherwise be appropriate.”
You can read a lot into this. Bearing in mind the fact that the letter of comfort was later accepted as useless, does the rest suggest that regulation was not so strict as it ought to have been. False security perhaps?
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Dave – ok, so the LGDAG is asking for the States to use govt money in the interim, with the aim that it will be repaid by the administrators. Next point: what is LGDAG asking will happen if there is less than sufficient recovery? Does the States have a right to recover any shortfall from depositors (i.e. it is a genuine loan, with the States taking the credit risk of each of the depositors) or that the States should swallow it (i.e. it is not a loan at all, but rather the States underwriting the LG debts)?
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Has the
“Springbok| March 30, 2009 at 8:33 am
STAND BY FOR A REALLY IMPORTANT MESSAGE FROM THE Landsbanki G20 (Expatriates) Action Group.
………
By the way this is NOT the really important message, that comes just a little later to-day.”
been made yet?
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CONCERNED GUERN:
This important news, was rather to large to be featured on this blog and contains graphics,
which are difficult to post here.
This news went to each and every one of your Government Ministers and Deputies, also the Editor of this newspaper, if you have the time, I would suggest you either call upon or speak to the Deputy for your Parish who will I am sure be able to enighten you.
Thank you for your interest.
Landsbanki G20 (expatriates) Action Group.
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Stephen- Thank you for posting your information. I’m not sure I term the info as “persuasion” to keep savings in Landsbanki. I wonder how many deposit holders carried out their own due diligence on the new holder of their funds?
It may also be worth adding that the regulators in many jurisdications (UK, IOM for starters) were also caught out by the Icelandic banking collapse. Recent financial scandals, such as Enron, Madoff, Stanford etc have all taken place under the nose of regulators so perhaps the lesson to be learned is to not trust anyone but yourself!
Dave- Thank you for your comments regarding Scarbrough/Skipton (also noted by another poster). I will be reducing my epoxsure accordingly. And as someone who is self-employed, my employer was more than happy for me to comment on this forum!
I feel your point about the elderly depositors is valid. Perhaps a proposal could be made from the various Landsbanki groups that anyone over the age of 60 be advanced up to £50K on the money expected to be returned by the administrator? This advance could be funded by the banks involved in the new depositors protection scheme, with them being repayed once the administrator has received the funds.
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Frank; nice you know how to use the internet. Many elderly savers do not and the papers were often contradictorary on the position of Landsbanki. Couple that with 1 year bonds that they were not able to cash in early and the rest is history. As for knowing saving in a bank is an ultimate gamble, a common mantra espoused now with hindsight, it is best we pull any money left out now and put it in a hole in the ground. Obviously with Skipton/Scarborough currently offering high rates they should be closed down before they go bust. Wait a minute though, RBS, Nat West, LloydsTSB offered paltry rates so they must have been safe. No they went bust and Guernsey savers got bailed out by UK taxpayers. Sounds fair. And HSBC, if the rights issue doesn’t work will China bail them out? I doubt communism has moved that far yet. So take your money and run. Pay and receive everything in cash, the government and the banks will hate it but what the hell both have been found to be wanting. Here Mr. Trader how much for cash? Wink! Wink!
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I thought this was an article about G20 inclusion – not Landisbanki?
Bilateral agreements signed or not, I doubt it will be enough to avoid the ‘drop’ by G20. There is too much money in accounts here for the U.S. to drop any interest.
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Janson, I think you’ll find that RBS, Nat West (actually the same bank), Lloyds TSB did not “go bust”. They were bailed out before they went bust, which therefore protected all savers (Guernsey savers included). If the Icelandic government had bailed out Landsbanki, then your money would also be safe.
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Greg
You said:
“This advance could be funded by the banks involved in the new depositors protection scheme, with them being repayed once the administrator has received the funds.”
I am surprised that a man of your obvious knowledge cannot see that there is absolutely no way the banks will ever agree to this. That is why the deposit protection scheme was not introduced with retrospective effect.
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Greg – thank you for your response.
Your final paragraph virtually duplicates the PDCS proposed by the Administrators to Chief Minister Trott (other than the age requirement) and subsequently rejected by him (without debate by our elected deputies). Hopefully his staff may read your posting for him.
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Now I am conpletely confused. A few posts above this, M J Ashbey correctly points out that the banks would never agree to retrospective funding of a protection scheme.
However, several posts above that, Mark Ashbey (who I assume is the same person as they have the same avatar) says this:
“The Administrator came up with two options to repay investors. It would involve either a ‘phantom’ deposit protection scheme of a Scheme of Arrangement. These would be part-funded by the banks, via a loan from the UK and a miniscule portion of the £1.5bn that Gsy has reaped in revenue from its finance centre over the past five years.”
“Part-funded by the banks” – have you not just completely contradicted yourself???
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First of all, my I say that I do sympathise with those Lansbanki savers who have been hard hit by the collapse of the bank. However …
Springbok – Guernsey is now a safer place to deposit money than when Lansbanki savers did. Why then did you deposit your money here if it was so unsafe ??
Those of you who deposited money in Landsbanki, or the Chesire beforehand, were depositing in an account not backed up by a depositor protection scheme. Whilst I appreciate that you may have been unaware of this fact, I think it unfair to expect Guernsey taxpayers to compensate you due to your ignorance. Ignorance ( of the law or otherwise ) is no defence. If you were misled into thinking you were protected, then I would imagine you have a good case in law to sue your advisor for compensation. The States of Guernsey, and the GFSC, to the best of my knowledge, never made such a claim, and are therefore not those you should be persuing.
The guarantee you will all have had was from Lansbanki’s parent companies. If Landsbanki Guernsey failed, they would have compensated you. However they failed first – thus making the guarantee worthless. Lansbanki Guernsey was in fact in very good health – it had a level of liquidity most banks these days could only dream of. The main cause of its downfall was the amount of cash tied up in its parent banks in the UK when they collapsed. Perhaps you would all like to ask the UK when they are going to release this money ( YOUR money ) that they insist on holding on to. Again please note, the UK has your money, not Guernsey.
As a final note – an ever growing list of totally independent UK banks would have fallen without collosall amounts of cash from the Government. The obligations on otherwise healthy banks and building societes to the depositor protection scheme is significantly impacting their profitability.
Only one bank has fallen in Guernsey – and that was due to the collapse of its parents in the UK and Iceland. None are, to the best of my knowledge, on the brink of collapse, and none have needed significant financial support.
And yet you are campaigning that Guernsey, not the UK, is unsafe and poorly regulated, and should be blacklisted ….
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TL
Like you I was confused by the stance now seemingly being taken by Mr Ashbey.
However, I concluded he was being cynical.
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TL
There’s no contradiction: the banks might be persuaded to join a Scheme of Arrangement on a commercial basis if they thought they might be able to get something out of it.
However, they would refuse point blank to fund any deposit compensation retrospectively (which is what Greg was talking about). They are two quite different things.
Please remember that the Administrator proposed two quite distinct options – both of which were not even considered by the States due to “lack of appetite”.
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Toby
Quite brilliantly put.
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Toby
You said: “Springbok – Guernsey is now a safer place to deposit money than when Lansdbanki savers did.”
First of all most LG savers deposited in the Cheshire and not an Icelandic bank.
Second, Gsy is now only marginally safer as compensation is reduced pro rata of lost eligible deposits exceed £100m.
In the case of Skipton / Scarborough, for instance, you would only get £12,500 of your £50,000 back because they have £400m in eligible deposits.
Others have much larger amounts so you would get even less back.
Much as I wish the good people of Gsy well, I wouldn’t deposit a further penny there, I’m afraid.
The UK, Netherlands etc etc have effectively guaranteed all deposits and the Isle of Man is working flat out to devise a Scheme of Arrangement in order to repay the majority of KSFIOM savers’ deposits within two years.
In contrast, what has Guernsey done?
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M J Ashby- I don’t think I ever said that proposal would work!
But it would be interesting to see if the Landsbanki action groups who appear to be overly concerned about the elderly (see various posts above) would put their own interests behind the olders members of their groups?
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Toby
The guarantee you to Landsbanki Guernsey clients was indeed from the Landsbanki parent.
However, thst guarantee / letter of comfort was obtained by the GFSC/. We know the letter of comfort was a legal waste of space even if Landsbanki Iceland had survived.
Is it understandable for LG customers to feel that the GFSC had let them down by failing to obtain a letter of comfort that was legally binding?
I know that a even a letter of comfort in this instance would have been of little practical value, but bearing in mind the Foot review says ” GFSC also sought and obtained a “letter of comfort” from Landsbanki in respect of LGL. Such a letter is not, in our view, a requirement before a licence is granted. But it allows the host supervisor to give the subsidiary more operational freedom than would otherwise be appropriate.”.
Toby, as you say “The main cause of its downfall was the amount of cash tied up in its parent banks in the UK when they collapsed”.
Did the GFSC give LG more operational freedom that they should have, relying too much on the useless letter of comfort. This appears to be what Foot is saying in the quote above.
There is an increasing suspicion of lack of realism by the GFSC of what was happening in 2008. Should they have put steps into place to ensure that the level of upstreaming was a lot less than it actually was?
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One cannot help but sympathise with the depositors who have, up until now, lost a large proportion of their savings. However, I wonder if they are being well served by those who would like to destroy the Guernsey finance industry in revenge for their loss. The best hope for recovery of their deposits is the continuing success of the businesses that some members of the action group wish to bring down.
As has been said elsewhere, the plight of the LG depositors does not loom large in the minds of the international finance community. It is, or should be important to the Guernsey community but it must be remembered that it was the transfer of funds out of the island by the parent company/s that caused the problem in the first place. Is the LG action group pursuing this line, too?
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Greg
No, that’s true: you didn’t say it would work. But you did say:
“This advance could be funded by the banks involved in the new depositors protection scheme, with them being repayed once the administrator has received the funds.”
which is definitely a non-starter. Ask the banks if you don’t believe me.
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IF, as Springbok says, Landsbanki investors/savers were not chasing high returns on their money, then what other motivation would you give for choosing an obscure bank as opposed to a high profile British high street bank? As with any form of investment there is a measure of risk V return & ultimately it is the responsibility of the investor to weigh up the pros & cons.
I am getting fed up with the attitude of Landsbanki customers in the way they are trying to blame the people & the government of Guernsey for decisions that they made themselves. If you’re not prepared to take the responsibility for your own decisions, then at least look to the real culprits in this whole debacle – Icelandic banks & the Icelandic government.
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Springbok – so much for your storm. Despite all your efforts there is barely a ripple for Guernsey. You were unsuccessful.
What you were successful at though was alienating yourself and your fellow depositors from the people of Guernsey who were by and large sympathetic to your cause. That is not the case any more. That is a shame because many of you are truly deserving of sympathy, what a shame that you ruined it for them all to no avail.
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Personally I don’t feel any great sense of victory that the Landsbanki depositors have failed to discredit Guernsey. I just wish there was some way of helping these people get their money back without asking ordinary Islanders to fork out for it.
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Herbert
For the umpteenth time, they didn’t choose some obsure bank. They chose the Cheshire. Their only folly was not to withdraw their deposits the moment they discovered their savings had been sold to an Icelandic bank that most of them had never heard of.
CD
LukeB said in his Mythsbuster list:
“…taxes have been low in Guernsey thanks to the huge revenues generated by the banking industry and depositors’ money in particular (£1bn of revenues for the period 2002-2007, according to the Policy Council figures). In particular, taxes paid to Guernsey by EU based depositors only, under the European Savings Directive which was enforced as of 1 July 2005, accounted for €1.64 million during the second half of 2005 (= £1.1 million at £’s average exchange rate during that period) and €5.6 million in 2006 (=£3.9 million at 2006’s average exchange rates). Figures are not available yet for more recent years but a conservative extrapolation based on 2006 figures indicates that, by the end of this year, Guernsey will have collected some £17million from this tax alone. [See http://ec.europa.eu/taxation_customs/taxation/personal_tax/savings_tax/savings_directive_review/index_en.htm for details; Guernsey tax is 1/4 of tax collected on behalf of countries of residence as those countries receive 75% of the withholding tax and Guernsey 25%]
Secondly, Guernsey is on course to have its reputation severely tarnished for many years to come as the only country which finds it acceptable for depositors to lose their savings. The current inaction will necessarily lead to a loss of future business and hence, much greater taxes for local people. Guernsey’s Chief Minister is basically trying to kill the goose who laid the golden eggs.
As concerns Landsbanki itself, based on various information provided by the administrator, the ultimate deficit is likely to be in the £0 to £20million bracket when all assets are realised in a few years’ time. The cost of a loan to the bank by Guernsey would therefore likely be in that bracket; to put this in perspective, this corresponds to 0% – 1% of Guernsey’s GDP, ie relatively very small. As a comparison, it is estimated that the UK will have spent 20% of its GDP to fight this crisis, including bailing out three banks operating in Guernsey (Northern Rock, Lloyds and RBS). It would seem to anybody with common sense that it is a very small price to pay for salvaging the island’s long term reputation, and future flow of business. Again, Guernsey is the only place in the West which has not rescued its depositors and the world has taken note of it.
And, finally, this cost could essentially be met by the tax collected under the EU savings directive and not by taxes paid by local people.”
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Springbok, may I suggest that you visit the OECD website for clarification of how Guernsey is seen in the financial community for tax regulation and transparency. You’ll note that Guernsey is placed within the same bracket as the G20 countries themselves.
Guernsey IS NOT designated as a tax haven.
Perhaps you will now focus 100% of your efforts constructively on recovery of monies from the parent company (who via parent company loans) repatriated your monies to Iceland.
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yes i appreciate this thread has now become subsumed into Landsbanki. It s terrible for retail depositors to have lost their cash, often their nest egg or life savings. I don’t have the wisdom of job so I can’t come down on a particular side since clearly the issue is very nuanced. What I would say is that this episode shows up that the offshore finance centres are there to help facilitate transactions for the big commercial entities, who have deep pockets to go down the breach of contract route if need be, but they are not places retail investors should be looking to place their funds and that includes us locals.
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Mr Ashbey
Seems more like a myth creator list to me.
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Stephen
That’s unfair. I did not create those myths. Those figures were collated by our Committee following a meeting with HM Treasury, which provided some of the figures. Our Committe has been working flat out since October for the benefit of all of us and have done excellent work. In sharp contrast, what has the Government of Gsy done to help?
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wmen
Dead right
Daniel
Wrong. Gsy is still classified as a tax haven. Always has been.
Yesterday’s list merely confirms that it has signed a minimum of 12 tax-information-exchange agreements.
However, Gsy is the only one of the three Crown Dependencies that has been blacklisted among the international community as a banking deposits centre owing to its steadfast refusal to lift a finger to help stricken savers.
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Mr Ashby
I am sorry but, regardless of where you got them from, your figures are way off the mark. Please don’t believe all of the statistics figures being bandied about by the anti-Guernsey lobby.
According to the ACTUAL 2006 Guernsey budget figures, total tax revenues were £306 million, government expenditure was £297 million leaving a budget surplus of £9 million. The econonmy was doing well in 2006 – anyone who knows anything about the real economy of Guernsey also knows that that budget surplus is a thing of the past.
Just because billions of pounds pass through (or are deposited in) Guernsey does not mean the Island is creaming off vast sums in tax. People or companies (who do not have a legal obligation to pay tax elsewhere) can choose to deposit money here – and they do so because it incurs little or no tax (which is partly why Landsbanki were able to offer such high returns).
I am sorry you lost your money, truly I am, but we here in Guernsey are struggling to find money to maintain our schools and fix our roads. We are not the millionaire’s playground that the media would have you believe. If you are asking me whether we should use our relatively modest tax revenues to compensate you or to renovate our local secondary school (which is, literaly, falling down) – I’m sorry but the school wins.
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Sorry Mr Ashby – just picking up on your suggestion that compensation to Landsbanki depositors could be paid out of EU Savings Tax.
EU savings tax is a withholding tax applied in Guernsey where an EU resident earns interest on monies deposited in Guernsey.
So – for example – if you were a French taxpayer in 2006 and earned £1,000 in bank interest from your Guenrsey bank account, the Guernsey tax authorities would have deducted 15% (it has gone up to 20% since then) – in other words Guernsey would have retained £150.00.
However – 75% of that £150.00 would then be paid to the EU Member State where you were resident (in this example France). This means Guernsey would have received a total tax revenue of £37.50.
Relatively few of the people depositing money in Guernsey are subject to EU Savings Tax and – in 2006 – the total withholding tax revenue IS INCLUDED in the £306 million total tax revenue figure I quoted previously.
In other words – no, we cannot compensate Landsbanki depositors out of EU savings tax receipts.
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Please point us to the official web site confirming this supposed black-listing. As far as I can see, this only exists in the heads of Landsbanki Action Group supporters.
And the only thing LAG has managed to achieve is to erode the support that Guernsey people had for those unfortunates that unwittingly lost their savings.
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M J Ashby
You state that Guensey has always been classified as a tax haven and always will be – by who exactly?
Who or where states a defitive list of tax havens and where is Guernsey’s name on the list?
What is YOUR definition of a tax haven? What is a tax haven? And prey, where is did you buy your crystal ball from that has shown you that Guernsey will always be a “tax haven” if only you used your crystal ball to look into the future and forsee this situation – you could of pre-warned landsbanki customers and saved a whole lot of hassel!
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SDG
Being a tax haven and being an unsafe centre for banking deposits are two totally separate issues.
Yes, Guernsey has signed 13 TIEAs but the fact remains that it is the only country in the world that has refused to help stricken savers. You can’t deny that no matter how hard you and the other Cheshire LG saver-bashers in this forum try to avoid answering that one.
Why would anyone need a crystal ball when depositing savings in the Gue branch of a UK building society, the Cheshire, as most did?
The new deposit guarantee scheme only makes Gue marginally safer because compensation is reduced pro rate.
As an example, you would only get £12,500 of your £50,000 back if Skipton / Scarborough were to go bust because their £400m deposits are four times the maximum covered by the scheme.
You would get even less back with the other banks which have larger eligible deposits.
As I have said repeatedly, nothing personal against the good peole of Gue but bottom line is depositing savings in Guernsey can still seriously damage your wealth – even with its new deposit compensation scheme.
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To Whom It May Concerns and that includes all Landsbanki Guernsey Bashers and those who fail to be able to discern the facts concerning rates of interest and other pertinent facts that have been illustrated to you on this blog over the last few days, I would say to you:-
:THAT WE MAY HAVE LOST THE BATTLE BUT THE WAR IS NOT OVER:
” Aluta Continua – Our Struggle Continues ”
And will do so until we recover 100% of our savings.
SPRINGBOK
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Toby,
You stated ‘Only one bank has fallen in Guernsey’. Thats only because some of the others, Northern Rock Guernsey, RBS Guernsey were bailed out by UK taxpayers! Quite handy that you have neighbours with deep pockets to bail out your finance industry when it is needed.
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In testimony given to the Treasury Select Committee is was clear that the Guernsey Financial Services Commission (GFSC) was unhappy at the way it had been treated by the UK FSA. It is now clear that Mr Trott did not want to voice his displeasure at the shenanigans of the UK government for fear Guernsey would be black listed in retaliation. Landbanki Guernsey depositors are thus paying the price for making sure Guernsey was not black listed!
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