Positive outcome is expected from G20
Tuesday 31st March 2009, 2:30PM BST.
GUERNSEY should expect a very positive outcome from this week’s G20 summit, according to Chief Minister Lyndon Trott.
With leaders from around the globe gathering in London on Thursday, the role of so-called tax havens and offshore centres has been in focus.
Jurisdictions including Guernsey have been working to sign tax information exchange agreements to help appease those who want a blacklist of ‘uncooperative’ places drawn up.
Deputy Trott (pictured) said the three main and objective assessment criteria regarding so-called uncooperative jurisdictions should be:
- Are they transparent?
- Are they cooperative?
- Are they well regulated?
‘We clearly tick all three boxes and therefore under those clear criteria and the rule of law we cannot reasonably expect to find ourselves on any blacklist,’ he said.
‘Clearly, having 13 tax information exchange agreements is a key indicator of our commitment to international standards and cooperation.
‘Importantly, our standards of regulation embrace and often exceed international standards.’
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Yes, it is great that Guernsey is a tax haven that keeps the island economy going. But for some of us born on the island with no English relatives, I am not given full EU citizenship. I for one would like to see Guernsey fully intergrated into the EU. I should have the right to be a full EU citizen, and I think that the States of Guernsey should be taken to the European Court of Human Rights on this issue.
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But like all the offshore finance centres , we have no capital adequacy regulation (CAD) of the structured finance vehicles set up over here which in economic terms are quasi-commercial banks. The implicit risks of this “originate and distribute” model have come home to roost and led to a massive misallocation of capital to areas that should never have received it over this bubble period. Its also happened with the same structures in the “On shore” Offshore centres such as Dublin and the Netherlands. This is where the G20 need to step in and force all jurisdictions to bring in common CAD requirements to these quasi-bank vehicles. The likes of Guernsey, Jersey and Dubling IFSC are only going to do that if they are strong armed into it.
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Paul Revere – I take your point and agree that banking needs to address the issue of under capitalisation – globally and not just offshore. Remember banks like Royal Bank of Scotland were hopelessly under capitalised and would have gone bust were it not for government intervention.
At risk of stirring up all the angry Landsbanki depositors again, as I understand it, the Guernsey branch of Landsbanki was actually well capitalised until the parent company removed all the cash (and then the UK government froze those assets).
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