Award-winning Panorama investigative journalist John Sweeney asked in Monday night’s programme whether it was time to close down tax havens and made allegations that could not have come at a worse time for the islands. (0844764)

NORTHERN Rock Guernsey could face regulatory action over allegations made by BBC’s Panorama, it has been revealed.

Director-general of the Guernsey Financial Services Commission Nik van Leuven issued a stern warning to the industry yesterday.

The ‘Tax Me If You Can’ programme on bad banking showed a Lloyds TSB Offshore banker in Jersey advising a client on how to route money through Hong Kong to avoid taxation and telling them it was of no interest to the bank if they told the tax man about income.

It also featured accusations that a Northern Rock Guernsey banker gave similar advice to a client.

‘The commission is acutely aware of the embarrassment to Jersey and Guernsey caused by Monday evening’s Panorama programme,’ Mr van Leuven said. ‘The commission’s position is simple – illegality will not be tolerated, nor will conduct which, whilst not unlawful, brings Guernsey into disrepute.

‘The commission requires high standards of conduct from all Guernsey’s financial services licensees.’

Mr van Leuven said Panorama had obviously edited the meeting with the Jersey Lloyds bank worker to be as damaging as possible.

He said the allegations against Northern Rock Guernsey were not as bad, but nevertheless conveyed a negative impression.

The bank has denied any wrongdoing.