2

W H Bonney

Ok this has really gone on long enough to be fair… I am fed up of picking up my Press & reading about the ‘poor Landsbanki savers’…

You chose to gamble your money in a high interest account… high interest comes with high risk – its like odds on a horse race… Guess what? You backed the wrong horse…. Get over it…

You want everyone else to pay for your poor judgement & its everybody elses fault…

Yes its a shame & I wouldnt wish it on people but we have all been affected by the credit crunch – every single person… Think yourself lucky you had the chance to do savings – most of us live hand to mouth & cant afford to save – you dont hear us blaming all & sundry – we just get on with it…

I had sympathy & full support for you at the start, but like the Airport Firemen – you are turning people against you with your ‘poor me’ attitude…

To quote an excellent film… “You either get busy livin, or get busy dyin” – get over it, move on & stop with the puppy dog eyes looking for sympathy & stop walking around with your hands out looking for the public to reimburse you…

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4

Aescyhlus

I always wonder how it is that Steve Le Poidevin, the former MD of the Bank, has never voiced his version of events. Was it a gag clause in his contract?

I am sure he has things to say.

I also am sure that the GFSC would hate to hear what he has to say ……..

A bit like the story with Harbour Trustees which also never really collided with the light of day. In that case Patrick Murrin never voiced his version of events.

Money, money, money – don’t you just love it.

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6

20/20

Steve Le Poidevin, the former MD of LG was retained by the present Administrator. That’s probably why we have not heard from him. I sent him a withdrawal request by mail, fax and pdf 2 days before the Court Order to commence the Administration and he ignored it telling me that LG was in good financial shape right up to the end. Thanks Steve.

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8

Paul

I hope this does not give another opportunity to those small minded people who continue to make light of this who situation.

Firstly, a bank is not an investment. That is what the stock market is for. If we had gambled our money on their in bank shares and the bank had gone into administration then that would be different. – Oh but then again those with shares in the Northern Rock bank which failed got their money back, even though that was a gamble!

Secondly, the rates being offered by LG were not the highest on offer. Plenty of mainland banks were offering higher rates at the time of the collapse.

Thirdly, why did you not complain when tax payers money was used to bail out the Northern Rock depositers. Or to bail out RBS?

Fourthly, as I live in mainland UK my taxes here have been used to bail out any depositers in Heritable and Icesave (including I am sure some Guernsey residents!). All we ask is that the Guernsey government acts the same as everyother government with some level of morality.

Those of you who say taxpayers money should not be used to support a failed bank should realise that you have benefited from the taxes we paid on our interest for all these years. You cannot have all the benefits of a banking supported state without some of the drawbacks!

If you are so against using our tax money to support your banking system and reputation maybe you should voice your opinion and request that all those tax pounds that have been paid by overseas depositors be given back to us! You cannot have it both ways.

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10

Miskina

Mr Bonney, High interest rates ? you must be joking !
Ordinary retail banks were offering higher rates than Cheshire/Landsbanki and all my Joe (who died last year) and I wanted was to have our savings somewhere safe. As retired British workers hoping to live somewhere cheaper than the UK and in the sun, opted for Malta. Of course that meant the UK Government wouldn’t allow us to keep our savings in a UK deposit account.
Do get your facts right, I am neithr a fat cat capitalist tax dodger just someone who paid her taxes for more than 40 years. I don’t expect sympathy but support of what the Depositors’ Action Group are doing, voluntar- ily and in their own time.
It is amazing what muck has been swept under Guernsey’s carpet and now slowly slowly coming to light. I bet you would feel the same if your scraped together savings were looted.
Its all very well another ‘poster’ saying one should keep an eye out, we are all wiser after the events of October ’08. When one’s beloved husband is slowly and painfully dying there is no time and energy left to read the financial columns, certainly if you aren’t able to afford private home-care.

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12

Aeschylus

Stephen John – thanks – a continuing typo!! Some also give the quote to Zapata (we can all use Google);

Greg – I know Steve and agree with you. It’s just a shame he has never had the chance to go public. It’s not a question of any conspiracy on his behalf just the GFSC’s quicksand approach to the disemination of information to the public;

I agree with Gary – it’s time that ALL parties were brought before a 100% independent tribunal.

The biggest losers will be the GFSC (I say this in the belief that, if this were to take place, then the depositors would get their money back).

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14

Joe Baggott

Matthew Dormans’ appeal for an enquiry is well supported, well presented and justified.
Had Guernsey shown a genuine intent to help, not just hollow rhetoric and silence from your Chief Minister then one year on
we might all be looking at the present situation from a different perspective.

I ask all your Deputies (and certain ill informed Guernsey residents ) to read Mr Dolmans’ letter and reflect on the contents. Certain individuals might have good reason not to want a truly independent enquiry but one must be held. There are many stones that need to be turned, and in public please.
We are not going to forget our squandered savings.
We are not going to vanish or be silenced. From Your island’s government it has been and remains…. “Too little – Too late !”

Most British expats have very limited choice as to where to deposit their savings, being largely denied access to accounts in our mother country. Now our family consider we have one option less !

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16

Janson Bewey

To AC, Bonny et al. I bet you were savvy enough to keep your money in a high street bank. Now who were they? Oh yes Lloyds TSB/Cheltenham & Gloucester (bust and bailed by UK taxpayers; RBS/NatWest/Coutts (bust and bailed by UK taxpayers; Northern Rock (bust and bailed by UK taxpayers); (bust and bailed by UK taxpayers); Bradford & Bingley; Halifax Bank of Scotland all bust and bailed by UK taxpayers. If you did save (or was it invest?) then give over your money to the UK government and thus the UK taxpayer. Why should they bail you out when it is not right for Guernsey to do so? If the GFSC could get it so wrong whilst telling us what a lovely bunch their ‘mates’ were; how can you expect people spread across the world and forced offshore to know that Guernsey was no more than a banana republic, run by spivs and wide boys? Personally I would rather the likes of those who said we were too well regulated to need a compensation scheme, and those paid to police the finance industry but colluded and failed in their duty of care, to be made to fund any deficit. They had our money through taxes; why should taxes be used to bail them out. And that is the crux of the matter; it is not bailing out the savers but bailing out those that created an overloaded sewer that they did nothing to prevent the burst. And now we are all in the proverbial. Lucky some people did have a saving mentality because the Guernsey welfare system will not be able to cope with everyone needing ‘toilet paper’ to remove the mess.

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18

aumet

The Chief minister ‘promised’ to review the Landsbanki case if it was found that the GFSC was negligent – i think that was proved without doubt – so when will the Chief Minister – soon to be back from his latest jaunt in China speaking on ‘ Innovative solutions for the financial crisis’ actually do something innovative like act as a statesman instead of trying to hoodwink all islanders in thinking that he cannot act without spending ‘their tax money’?
The UK government has negotiated loan repayments with Iceland as significantly higher interest rates than are prevelant today and has also instigated potential windfall taxes against financial institutions – these are mechanisms available to the Chief Minister if only he could seperate the junk from the junket!
So, at what cost the reputation of Guernsey as this call for a public Inquiry drags on and legal action against Iceland starts?
After the 0-10 fiasco how many more can the Chief Minister afford to make and be forgiven – one is a mistake; 2 careless; 3 ???

NObody in Landbanki is asking for anything other than fair treatment – is there a law in Guernsey against that?

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20

Stephen John

“this is only for account holders who (for some reason) refuse to have their details disclosed to their own tax authorities”

Here we go again.

How do you know these people don’t disclose the information to their own tax authorities?

If you have this information from your colleagues then they should inform the appropriate authorities that they suspect tax evasion or the FIS if they suspect money laundering.

Strange there have been so few referrals when evasion appears so endemic.

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22

Mike

Mark

Do you have any idea what would have happened to the UK if two of the biggest banks had been left to go too the wall?

You think our finance industry would have suffered. Just think with two clearing banks gone where they would have been. Creek and paddle come to mind

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24

Mike

Yes

But it would not just have been the finance centre but you (I assume you are local) and me. A significant number of Guernsey entities bank with those two banks – including the States of Guernsey.

Not only would the finance industry crumble but everything else as well and then we would become a county of the UK – that sounds good we could have all these EEC grants for infrastucture etc. Perhaps a good idea.

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26

Greg

Mark, as discussed before, it wouldn’t have been possible for the UK government to bail out the entities you mention without including the Guernsey subsidiaries. The Guernsey operations of Lloyds and RBS undertake a lot more business than just pure deposits. So your point is really pointless!

John G- I think you’ll find some of the comments by local people are due to the incessant sniping by mainly expat Landsbanki depositors about how “you’ll bring down our island”. No you won’t. And the longer you go on about it, the more you’ll lose the sympathy of Guernsey folk. You’re going to (hopefully) get 80% of your money back, and at the end of the day you chose to put your money in a place with no deposit protection scheme. Yes, the depositors probably deserve better treatment, and more information should be brought to light on the whole affair. But why should Guernsey taxpayers have to bail you out?

Stephen John- I don’t know if the expat investors who chose to pay withholding tax disclosed their details to their local tax authorities, but why pay a tax you don’t have to if you are already giving full details? Seems a bit fishy to me….. And the point seems to have been further enforced by the lack of rebuttal from the expat depositors. Not one has stated why they paid the witholding tax…..I wonder why?

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28

Aeschylus

Steve Le Poidevin is MOST CERTAINLY not responsible here. Who do you think he reported to?

Firstly, his board – why were they?

Secondly – his parent compay – who were they?

Thirdly – the good old GFSC. If the GFSC did not know what was going on then why was that? If the GFSC DID know what was going on then why didn’t they act? One way the other an independent enquiry is, to say the least, necessary.

I bet the States announce an independent enquiry and get Nik Van Leuven to chair it!!

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30

muzeek

Kay
Very well put, I am getting fed up with all of this.

Lansbanki depositors were going for a high risk investment, the rate they were getting was over 7% whilst I was getting 5% with my local bank.

I questioned this with my manager and was told that any bank giving over 7% was desperate for cash flow and could not be trusted.

I did my homework and decided to play safe and not risk losing my investments.

Now why didn’t Landsbanki customers do the same.

Simples, they were making too much profit.

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32

Kilo

Why should we as tax payers pay for a public enquiry into a private bank, these Lansbanki savers. I have sympathy for their situation, it can not be nice to have lost all that money. However, the facts are quiet simple it Guernsey didn’t have a DPS, something anyone could have found out. Bankers and Financiers caused the global crash by speculating and seeking higher and higher returns to offer there savers. the higher return the higher the risk. If you wanted your money to be safe why take risks with it in the first place.
Don’t ask me to pay for an enquiry, i want my taxes to be used for the benefit of the islands population, not a small number of people, Sorry!

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34

Mark

Mike

Yes, perhaps a good idea.

Greg

Not pointless at all. Very relevant to this debate. Fact remains that UK taxpayer bailed out Guernsey.

You’re wrong again: Cheshire LG savers will not recover 80%; they will recover 100%.

The States cannot afford to make up the shortfall – but it equally cannot afford not to do so.

It may take years of pressure but they will eventually realise they will have to do what is right, as the Isle of Man honourably did.

The battle lines are now well and truly drawn. On one side you have Cheshire LG savers who insist that they must be repaid in full, even if public funds must be used as has happened in the UK and Isle of Man.

On the other you have the rest of the population who are adamant that public funds are not to be used – except if a close relative has lost their life’s savings, of course.

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36

muzeek

Kilo
Best comment I have read in a long time.

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38

Aeschylus

“Those Who Forget History Are Doomed to Repeat It” – if Guernsey fails to arrange an independent enquiry which looks into the history of what actually happened here (and not just the GFSC’s whitewashed version of an enquiry – does anyone actually believe this served any reasonable purpose?) then there is every chance that the same thing can happen again in the future. If it does then Guernsey’s reputation (or what is left of it) will be in the shredder.

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40

Frustrated VOTER

Muzeek: I have truly lost count of the number of times you have repeated that same inane comment.

So, you asked your bank manager why the competition was offering better rates than his bank and he gave you reasons not to go to the competition. Doh!

You have also, in making your stuck-record comments, continually ignored, I suspect purposefully, the oft repeated fact that a very large number of LG depositors did not choose LG at all.

Very many were saving with the Cheshire Guernsey in longer term accounts that they were locked into and could do nothing about getting out of in the 2 years between the takeover and collapse.

Of course, the fact that very many LG customers were actually normal folk saving in a boring UK building society, locked into becoming victims when the GFSC allowed it to be taken over by a foreign bank they’d never heard of, rather than the stupid high risk gamblers you like to paint them as, is, I suspect, just an inconvenient truth for your preconceptions…

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42

Greg

Mark, I say your argument re the UK taxpayer bailing out Guernsey is pointless because the UK had no choice. If it bailed out Lloyds, RBS etc it wasn’t possible for it to not cover the Guernsey deposits. Please note that these institutions did not have Guernsey offices just for offshore depositors. They carried out numerous tasks for their onshore parents, and failure of the offshore parts would have most likely meant the failure of the onshore parents.

Following the Lehman debacle, the UK government was never going to let a UK bank fail. So yes, maybe us Guerns are lucky that the UK government stepped in, but it really has zero relevance to the Landsbanki issue and your lost savings. The UK taxpayers was bailing out it’s own banks, and part of that meant it was guranteeing Guernsey deposits. And please note, i’ve paid plenty of tax to the UK Treasury in my time, so maybe i’m getting a bit of return due to that bailout!

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44

Greg

Stephen, you make a good and interesting point. I am presuming at the time of the take-over the FSA and GFSC both thought the Icelandic banks were fine (and I’m guessing they were, pre the credit crunch).

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46

Mondaq

OOPS!

Guernsey: Guernsey Will Not Need A ‘Bail Out’ From The UK Taxpayer
22 September 2009
Article by Peter Niven
Guernsey’s Chief Minister, Lyndon Trott, has firmly rejected suggestions that the Island might require a ‘bail out’ from the UK taxpayer.
The financial stability of the British Crown Dependencies and Overseas Territories has come under scrutiny in the media during recent weeks….

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48

Student Jim

I wanted to clarify two points, because I gave up following the case a few months back.

1) Have the savers actually lost all their money? I was under the impression that they were getting / had got a fair chunk of it back already. Not 100% but more than 0%

2) The takeover of Cheshire Building Society occurred more than 1 year before the collapse. Surely you would have looked at the material sent to you by the building society and evaluated who now held it. One year is surely enough time to have arranged to move even long term deposits elsewhere?

I along with many other people are sympathetic towards people who have lost money in the financial crash.

However I am totally against this continued claim that anything less than 100% of the deposits back is unfair and that the local taxpayers of Guernsey should bail out the Icelandic company that lost some of your money.

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50

Mark

Student Jim

You said: “I am totally against this continued claim that anything less than 100% of the deposits back is unfair and that the local taxpayers of Guernsey should bail out the Icelandic company that lost some of your money.”

It wasn’t an “Icelandic company” but a Guernsey company that had been authorised by the GFSC to conduct banking business. The parent was Icelandic. Big difference here.

The UK spent £7.5 billion bailing out Icesavers, the Isle of Man spent nearly £200 million – yes, £200 million – helping KSFIOM savers and Guernsey will spend less than £20 million – about a tenth of the amount disbursed by the Isle of Man – to make up the shortfall for Cheshire LG savers.

Guernsey will simply have to do so because the pressure to do so will become unbearable. The UK and Isle of Man have really shown them up. The international spotlight is on Guernsey.

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52

Aeschylus

I wonder if people are getting so severely entrenched that they have lost their perspective.

On the one hand:

1. All of this talk about Guernsey being bailed out by the UK is, I thought, I little wide of the mark. The UK certainly lent money to its own banks to assist them through the crisis and it is the intention that these moneys are repaid to the Exchequer (or whoever actually lent it). The interest on these loans is steep so the banks will repay as soon as they can if, that is, they haven’t already done so. The fact that these banks had (profitable) subsidiaries in Guernsey is a very minor side car issue here and not really worthy of comment;

And then, on the other hand:

2. Mark wants us to believe that it was a pure stand alone Guernsey company that only had problems in Guernsey. This is clearly nonsense as it was in Guernsey purely and simply because it was a subsidiary designed and intended to upstream deposits to its parent. He also says that the pressure will be unbearable and I wish that the Landsbanki depositors had that amount of clout, I really do, but this will be old news once the final dividend has been paid – people will say, “Oh well, they got 80% of their money back so they didn’t do so bad, did they?”

It seems that the culpability of the GFSC in all of this is something that people seem to agree on irrespective of their beliefs – I have not seen one word of support anywhere for these people.

Perhaps everyone, on-island and off-island, concerned should unite and pursue the GFSC for a full independent enquiry. When the enquiry finds against the GFSC then make a claim against them and/or their insurers. They are funded by the finance industry, not the tax payer.

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54

Frustrated VOTER

Student Jim:

1) The LG depositors have had back 55% so far, and the administrators estimate that the final recovery will be in the range 70-80%, with it taking to the end of 2012 to achieve that.

2) The takeover of Cheshire Building Society occurred 2 years and a month before the collapse, but anyone with a fixed term account that didn’t mature before the collapse was *locked in* to the “no early withdrawals” conditions and couldn’t do anything about it.

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56

R. Johns

A few hard facts may help provide some perspective:

1) Folk who put their savings into Landsbanki Guernsey placed their money in a BANK ACCOUNT-not in a speculative investment. To describe them as ‘gamblers’ as some have done is absurd and disingenuous. It simply shows the ignorance of the writer.

2) Comparable interest rates offered by Landsbanki Guernsey were available from a number of other banks at the time including Bank of Scotland to name just one. Some banks were in fact offering higher rates.

3) Most of the depositors in Landsbanki Guernsey were/are elderly and rely on the interest from their savings to meet their living expenses. They are neither ‘fat cats’ not tax evaders as some commentators have suggested. Depositors include retired teachers, nurses and service personnel. One lady with her savings in the bank recently had (as opposed to celebrated) her 98th birthday.

4) Guernsey is the only state in the developed world not to have come to the aid of depositors in a bank on its territory and under the supervision of its regulator.

5) An independent enquiry will almost certainly find the GFSC negligent in the extreme. Could this be the reason why an enquiry is being so vigorously resisted?

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58

Arnald

Mark

Unfortunately the people that respond with theoretical analysis of your life and motives are basing their opinion on their experiences.

If the people saying that the States primary moral remit, as those who are brave enough to make what is supposedly a solemn pledge must abide by, are to be trusted with the elected power that shapes the future potential for our decendants and also to defend the rights and well being for ALL people within their community and those that are impressed enough with our island to trade – however immaterial, isn’t enough of a reason for political intervention, then something has gone very wrong with the system.

It is quite clear that the politicians had advice leading them to pretend an ideological case for being impotent.

What was that advice?

That they could be confident that a rapid unwinding of the assets of a recommended bank in well-regulated, OECD white listed and fully E…..erm….fully fantastic Guernsey would not last longer than a lifetime and there would be a guaranteed 100% result due to the immaculate regulatory system having an expert knowledge of what the bank does, privileged and in our midst?

Or that the case was so mired in secrecy jurisdiction gunge that unpicking the picked bones of a ‘successful’ Guernsey banking operation that became a pawn in a hostile act of financial aggression between callous individuals and a number of nation states (this is an ‘attack’ on Guernsey citizens Deputy Jones, not by EU commissars but by Guernsey run banks!) that the single most trumpeted triumph was acquiring (from the phone book) a mobile phone number of someone who couldn’t help. So Guernsey, that thinks itself primarily as a company, decided the risk of using the expertise of the island to devise some sort of provision to give the innocents back their deposits left for safekeeping in an industry media recommended managed institution in Guernsey, where many of the trusting clients have contributed life and soul, was actually grave enough that it would be destabilsing to the wider community?

Or is it because they are satisfied that the reputational risk of washing their hands of moral responsibilty would be less than the hurtful snide comments from bankers at the next love in?…. Causing Trott to cry for executive government so that helping people starts by asking a finance ‘expert’, who is preferably in a superior position, but equal would do?

In light of the potentially dishonest (if people deliberately lied in order to risk the island for market share, isn’t it treason or something worthy of the birch?) and at best, stupid, duplicitous actions and motives surrounding the ‘fully EU compliant’ claims and our international standing etc, speculative logic offers no redeeming point.

The least damning verdict is crass incompetence by social and professional structures designed precisely for social and market stability.

However, back to the advice it received.
Which part of society can always take the hit in the name of future prosperity? Which part of society will ignorantly accept the business created trauma and incorporate it into their stressed lives as another persistent but incomprehensible annoyance to erode their happiness a notch?

Is it the finance sector, you know the one that calls for service cuts for the vulnerable to help (I’ve downgraded to ‘help’ post Trott-Fail Day, before that the implication was not just help, but do a ‘duty’ to take the hit to) reduce this mysterious nuisance deficit?

No.

You’d think they’d stop criticising and start showing some of this above-weight-punching talent and considerable pre-cognitive abilities that they claim on revision.

Despite all that I DON’T BLAME THE BANKS for government failings. The States are full of big boys and girls that can think for themselves.

Accountability, integrity and transparency. Should it really be impossible to attribute this to a democratic government?

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60

MrsPinthepantry

Hi R.Johns darling!

Let’s examine your ‘hard facts’

1) “Folk who put their savings into Landsbanki Guernsey placed their money in a BANK ACCOUNT………….”

Yes they did and at that precise moment they relinquished control of their money and assumed risk. If supposedly educated people want to perpetuate the myth that fractional reserve banking can both be profitable for the bank and safe for the investor/ depositor then this sorry farce is bound to happen again. How exactly do the hopelessly naive think the bank magically manages to pay them interest on their savings and makes money during this process??

‘The people wish to be deceived; let them be deceived.’ -Carlo Carafa

2) “Comparable interest rates offered by Landsbanki Guernsey were available from a number of other banks at the time……..”

Yes that is true and no doubt more astute investors chased the better rates from the safer banks. In effect Landsbanki was a financial illiteracy detecting machine. No matter how hard you try nor how many layers of protection/ legislation are put in place it’s impossible to protect idiots from themselves.

3) “Most of the depositors in Landsbanki Guernsey were/are elderly and rely on the interest from their savings to meet their living expenses………”

Really? I have no idea if this is true or not and I doubt it can be proved one way or another so won’t comment further.

4) “Guernsey is the only state in the developed world not to have come to the aid of depositors in a bank on its territory and under the supervision of its regulator.”

Well that can’t be true since Guernsey is not a State.

5) “An independent enquiry will almost certainly find the GFSC negligent in the extreme……..”

So what? You are probably right. But then can you suggest somewhere with a better regulator? Please don’t say in the US, UK or anywhere in the EU. The mess the whole system is in occurred due to massive oversights by their various regulators and central banks.

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62

Jenny

Let’s re-consider that this is a call for a public enquiry into what was allowed to happen and why.
The FSA and indeed Her Majesty’s Government have made it clear that the regulation of the banking sector in Guernsey is the sole responsibility of the Guernsey authorities and regulator by stating as follows:
‘oversight of Landsbanki Guernsey Limited is the responsibility of the Guernsey Financial Supervision Commission and therefore arrangements for depositors in Landsbanki Guernsey is a matter for the Government of Guernsey.’
I am not a local Deputy, but as the states appointed the GFSC to have regulatory oversight of locally regulated banks, if I were a Deputy I would consider it my responsibility to find out how and why this failure happened.
Furthermore many posts on this site are questioning whether the local Government should fund a bail-out of the depositors “lost” funds in this locally regulated bank. From my limited understanding the running cost of the GFSC have taken far more from the public purse in its time since formation than the potential cost of correcting the regulatory failure of this one local bank.
Should the public enquiry not get to the bottom of why so much local tax payers funds have been handed over to fund the GFSC over all those years and for what purpose or benefit? None if the GFSC are unable to appropriately discharge their main function. Is that not the real question here?

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64

Kerzmeister

Jenny: I can answer that one for you without the need for a public enquiry – the GFSC is not funded by the taxpayer, it’s funded by the finance industry through licence fees.

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66

IvNothinginthelarder

Well done Mrs. Pinthepantry! Your supercilious and ill-informed post finally succeeded in provoking me to respond to some of the many smug and inaccurate comments on this thread.

Like approximately a third of the Landsbanki Guernsey account holders, [Source: Deloitte] I am a British Expatriate and, like the majority of the LGDAG members, a pensioner. I worked all my life, paid my UK taxes and saved for my retirement so that the interest earned would supplement my UK State Pension.

I did not play the stock exchange, or make other investments, I placed my savings in banks, as I could not afford any risk. Hindsight which engenders comments such as yours, and other smug folk who had their money in other banks or don’t bother to save at all, is a wonderful thing isn’t it?

BTW Landsbanki did not offer the best rates – and neither did the ‘better banks’ – RBS, HBOS etc., who later needed HM Government bail-outs, or major investment from Qatar, like Barclays. Remember Mrs.P?

Why was my money offshore? Because my UK bankers would not accept an overseas address, despite over forty and twenty-five years respectively without incident. I suggest you read the research which unequivocally confirms that Expatriate British citizens are denied onshore bank accounts by the Banks’ and Building Societies’ own Know Your Customer rules. This research was taken into evidence by the Treasury Select Committee Inquiry into the Banking Crisis and may be found on page 97, ref: EV 920 of Volume II of the Written Evidence, dated 17th March, 2009 at .

As a result of this evidence, TSC Chairman, John McFall, requested that Hektor Sants, CEO of the FSA should look into this situation and report back to the Committee. Needless to say this has yet to happen. With one or two exceptions, and a total lack of competitive choice, the situation has not changed.

As far as the popular slur of ‘Tax-Dodgers’ goes, although not members of the EU, Guernsey is a signatory to the European Union Savings Directive 2005 (EUSD), which forces EU resident savers depositing money in any country other than the one in which they are resident to choose between forfeiting tax on interest earned, at the point of payment, or allowing notification by the offshore banks to tax authorities in their country of residence. This tax affects any cross-border interest payment to an individual resident in the EU. [European Union Savings Directive FAQs on HMRC website. Undated. ] Those living outside the EU may be taxed on worldwide income or on inward remittances, as I am.

In common with other Landsbanki depositors I believed that the guarantee from the Icelandic parent was valid and enforceable. I also imagined that by accepting Landsbanki into the Guernsey financial community, the GFSA had done its own due diligence to verify and continue to monitor, its credentials.

What I, not being a financial industry banking expert, had no way of knowing that:
a) the Government of Iceland was not competently or effectively regulating its financial institutions.
b) that the Landsbanki parent’s‘Guarantee’ was not worth the paper it was printed on
c) that the information quality of ratings agencies like Moody’s and Standard & Poors was over-rated and not as accurate as I had expected
d) that HM Government would abandon its responsibility to ‘defend life and property’ of the Crown Dependencies and completely fail to represent the interests of British citizens’ who banked in Guerrnsey, in its multiple negotiations with Iceland in respect of the three Icelanding Banks under its jurisdiction.
e) that the actions of the UK Government in repaying UK depositors in IceSave, not just the statutory £50K DCS but their entire lost savings, and then, with the Dutch Government holding Iceland hostage against its IMF loans until a repayment agreement was signed, provided them and bond-holders with preferential creditor status. As such this will absorb a large percent of the retrieved assets: rendering any potential recovery by LG depositors virtually worthless.
f) that (to placate MrsPinthepantry’s semantic issue-avoidance) Guernsey is the only jurisdiction not to come to the aid of depositors under its regulatiory control – despite the fact that ‘The Finance Industry is Guernsey’s major industry . . it contributes over 55% of the island’s Gross Domestic Product’ [] So, not really ‘tax-payers’ money then?

To return Mrs. Smartypants’ ‘compliment’, here’s a quotation, offered as a motto to all those who are fortunate enough not to be in our situation and who seem to derive intense pleasure from denigrating us and deriding our predicament:

‘I doesn’t make any difference who we are or what we are, there’s always somebody to look down on! Somebody to hold in light esteem, somebody to be indifferent about.’ ~ Samuel Clemens.

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68

MikeB

BETTER REGULATED?

Well Mrs P, Australia and much of South America spring immediately to mind.

But as far as ordinary savers with Bank Savings Accounts are concerned the EU members have rightly taken responsibility for the failure of their Regulatory Institutions and Guernsey has not (yet). That is the point that is being made.

Another point that is being made is that the UK taxpayer, many LG savers included, has “rescued” Guerns with savings accounts in most of the other Guernsey Banks; a fact which most Guerns seem oblivious to.

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70

Susan

Mrs Pinthepantry’s disgraceful patronising insults tell us a lot – about her – and bring shame to the island and its people.

There’s no sense in trying to debate with people who clearly believe they are of such superior intellect, they’re always “right”.

The best thing is to just ignore them.

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72

Greg

But Paul, why were you paying any tax? You could have had all of your interest tax free (should you have wished to your details to be passed to the Inland Revenue).

And if you weren’t happy for the Inland Revenue to know your details and that you had money offshore, the most obvious question is why?

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74

Mark

Greg

Welcome back. And thanks for continuing to help to keep LG at the top of the ‘Most Commented’ chart. The issue is far from “fading away” – much as you would like it to do so.

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76

Arnald

Yeah, but Greg, you sound like an arrogant money leech. So the more people that read what you say, the more people will come to the same conclusions about the Guernsey Way. Screw pensioners. Screw the honest. Screw the World.

That is the message coming out of Guernsey.

Petulant childishness. On other blogs people are defending the BNP. The vaccuum beckons.

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78

Greg

Arnald, the day I worry about what you think is the day I re-pay the LG depositors out of my own pocket. I’m sure you’ve noticed I no longer bother to comment on your claptrap posts, as I feel it’s not right to poke fun at people such as yourself.

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80

Mark

Greg

I can sense your glee at the loss of 20%. I fear you will be bitterly disappointed because Deputy Trott will have to do what is right sooner or later, just as the Isle of Man has honourably done. The IoM spent nearly £200m of public funds (which include a minority share of individuals taxes paid), the same amount that the States squandered on the doomed zero-ten regime. Guernsey will only have to spend less than a tenth of that amount. They cannot really afford to do so – but they can afford even less not to do so if they want to salvage the reputation of their finance centre, where deposits have become increasingly important after the constraints in the wholesale money markets.

I also see that you persist in your attempt to smear Paul and others as tax evaders but here too you are wrong. For years now banks have been providing HMRC with details of customers that have offshore accounts so there is no scope for evasion. UK residents can choose to either pay deferred tax at the end of the tax year – or the more hassle-free method of simply having the tax withheld at source, 75% of which is wired to the UK Treasury.

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82

Greg

Mark, I can assure you I have no “glee” in your 20% loss. I personally know a couple of people who lost cash in Landsbanki, and they are not happy although, as local people, they are not invovled in a crusade against the island (just the people responsible).

But if you believe Mr Trott will do the right thing then you obviously don’t know anything about Mr Trott and his powers.

You also seem to be a little misled regarding zero-10. The island hasn’t lost £200mio. That figure has been thrown about recklessly by several, however it was purely based on previous tax receipts and doesn’t take into account the credit crunch (it probably includes predicted tax take from LG, and i’m sure you’ll be the first to agree that they won’t have made a profit in 2008). As many banks struggled to make a profit in 2008, it is highly unlikely the tax take would have been £100mio.

I suggest you also do some research into the relationships our banks have with the HMRC, as your knowledge seems to be a bit lacking in this area. Yes, banks have provided info to HMRC, but only when requested. Information has never been freely provided without request, so maybe you should get your facts right before posting.

The client who decides he doesn’t want his details disclosed is always going to be open to some degree of suspicion. And your arguement about less hassle is pure rubbish, as you would still have to disclose your Guernsey account on your UK tax return and would be liable for any difference between the withholding tax applied here and your rate of income tax in the UK.

I’m not attempting to smear any expat depositors, however it annoys me when you and your fellow depositors whinge about the tax you have paid in Guernsey when you’ve either not paid any tax or you’ve only paid tax to avoid disclosure of your details. You can argue until you are blue in the face, but by deciding to withold details suspicion is always raised. The witholding tax part of the EUSTD was not designed to make your returns “hassle free”.

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84

kevin

Whilst I’ve got some sympathy for those savers that lost money I don’t see why the taxpayer should foot the bill for whats been lost – we’ve already been done over as a result of the zero-ten scheme, it’s time the fat cat finance industry took some responsibility for its own actions.

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86

Mark

Greg

“Yes, banks have provided info to HMRC, but only when requested. Information has never been freely provided without request, so maybe you should get your facts right before posting.”

Wrong again. HMRC has been instructing banks to hand over details of ALL UK residents with offshore accounts for some years now.

“your arguement (sic) about less hassle is pure rubbish”

Not at all. See Paul Little’s post just below your last one.

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88

Mark

Greg

“I personally know a couple of people who lost cash in Landsbanki, and they are not happy although, as local people, they are not invovled in a crusade against the island (just the people responsible).”

If you think that deposits are unimportant, savers are expendable tax evaders and the LG story will just “fade away” why are you so worried about this alleged “crusade”? Doesn’t make sense to me.

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90

Greg

Mark, i’m not worried at all. I just like a good argument. The story has pretty much faded in Guernsey, apart from a few folk on this forum and the odd story in the Press.

And your HMRC point above is totally incorrect. Guernsey banks do not automatically hand over details of UK residents. It is comments like this that make me carry on posting, because pure lies do not help your cause. Maybe you should read around the subject before making such comments.

Stephen, I wasn’t party to those EUSTD comments, but they were wrong. The witholding tax was not introduced to facilitate tax planning, but as a way of keeping Guernsey competitive with some other jurisdictions. The fact that it has an increasing rate and has a finite life should be an example of this.

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92

David

Stephen John

That’s not correct.

It wasn’t necessary at all to pay withholding tax in order to defer the UK tax liability. Interest earned offshore in the tax year ended 5th Aprul 2009 can be paid gross if the client opts for exchange of information, and the resulting UK tax isn’t payable until 31st January 2010. So you could have a 1 month fixed deposit maturing in May 2008, with the interest paid gross and re-invested/compounded, and the tax on that May 2008 interest isn’t payable until some 20 months later.

In contrast, if the client opts to suffer withholding tax rather than have his information exchanged, then 20% tax would have been suffered on the interest in May 2008, and every month thereafter, thereby negating half the benefit of legitimate compound interest

So why would anyone opt to suffer withholding tax rather than exchange information ? I’ve said it before and I’ll repeat it. In my personal view it would be prima facie suspicion of tax evasion, and the customer has to come up with a pretty solid reason and there are definitely some such reasons, for opting to suffer the withholding tax.

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94

Kerzmeister

“The Man”….[Yes, and the fact that the GFSC is funded by the entities its supposed to regulate tells you an awful lot doesnt it??]

LIKE WHAT?!!!! That’s the standard model of funding regulators worldwide as far as I can see. Would you really rather it was funded by the taxpayer?? Really??? Seriously – think about that one before you answer it…

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96

Arnald

David
Yep, that’s Murphy’s conclusion too, though I’m not sure how it’s offered to the customer, if it was presented like that would it be taken?

Kerzmeister, I honestly can’t believe that you think that self regulation works. It never works in any sector.

Why not the tax payer?

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98

Stephen John

David says “So why would anyone opt to suffer withholding tax rather than exchange information”.

Are you saying exchange of information is automatic

One of the outcomes of this and related threads is that Guernsey needs to be honest and tell would be depositors how precarious their capital is when left in Guernsey.

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100

Frustrated VOTER

Nobody has to “have a good read up” on the banking system to understand that comments like “supposedly educated people”, “hopelessly naive”, “The people wish to be deceived; let them be deceived”, “a financial illiteracy detecting machine”, “impossible to protect idiots from themselves”, and “blind ignorance” are intended to insult and belittle, and to say “oh, I am so much cleverer than you, stupid”.

The “truth” is in what such comments tell us about the person making them, and Susan is right that such condescending provocation is best ignored. However, I cannot let pass this self-styled expert’s flawed dismissal of Stephen John’s point.

SJ said: “It is also a fact that banks traditionally earn by charging more to lenders than depositors.”

By “traditionally” I take it that SJ meant a traditional bank that takes deposits from and makes loans to individuals and businesses (rather than one with an investment banking arm or other “casino” operations), e.g. traditional retail banks, building societies, etc.

MrsP said: “Well traditionally (going back several hundred years) yes, but in recent history – NO, not true AT ALL.”

Wrong. SJ’s comment is perfectly correct, both in history and now. Traditional banks still earn primarily by charging more to lenders than they give to depositors.

MrsP said: “They ‘earn’ because they are allowed to lend/ create far, far more money than they have on deposit.”

Wrong. Banks are not allowed to lend *more* than they have in deposits. They are allowed to lend *the majority* of what they have in deposits, retaining just a fraction of them in reserve. Hence the term “fractional reserve banking”.

MrsP said: “However, a return to full reserve banking though intrinsically much safer would effectively mean the end of the modern world. No credit cards, no overdrafts, no personal loans…”

Wrong again. This statement shows a lack of understanding of what “full reserve” banking actually means, which is that the bank has in reserve the full amount of deposits that could be withdrawn *at any moment*.

Let me make it simple. You go to a full reserve bank, which has £1000 of deposits all in instant access accounts, and you ask for a 1 year personal loan of £500. They will say no, because if they said yes and all the depositors asked for their money before you repaid the loan they wouldn’t be able to repay them; they wouldn’t have the “full reserve” ‘cos you had £500 of it.

If, on the other hand, the £1000 of deposits was entirely in 2 year fixed term accounts, then the full reserve bank would grant you the 1 year £500 personal loan (subject to your credit rating), because by the time the 2 year fixed term accounts matured and became *available* for withdrawal you would (should) have repaid the loan. So the bank would have a “full reserve” of deposits that could be withdrawn *at any moment*.

So, it’s perfectly possible, and indeed likely, to have credit cards, personal loans, etc, under full reserve banking, although undoubtedly they’d be a lot more restrictive. Credit cards would be matched against 30, 60, 90, etc day notice deposits or however long the bank gave you to repay the balance on the card, while personal loans would be matched against term deposits of longer duration than the loan.

Mortgages are, of course, more problematic for full reserve banks, as there aren’t that many depositors that would be willing to put their money into 25 year fixed term accounts that the mortgage loans could be matched against.

Fractional reserve banking, in contrast, means that the bank only has a fraction of what could be withdrawn *at any moment*, on the basis that, even though they could, not everybody will. In the parlance, fractional reserve banks “borrow short and lend long”, and I do believe everybody understands that when they stick their money into a bank it’s likely that a good chunk of it will be lent out to others for a long time, so they can buy homes, etc.

It’s also wrong to assume that all fractional reserve banks (i.e. all banks nowadays) push the fraction to the limit.

I do wonder what “P rating” would be given to a bank offering instant access, 30-90 day notice, and 1-5 year fixed term accounts, and that has assets that are 118% of deposits with 63% of those assets in cash and on-call (that’s instant access) placements, with the remaining 37% out in just 1-4 year loans?

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102

Stephen John

Traditional Voter

I tend to ignore Mrs P’s postings as being the work of a wind up artist, but one afraid to give his or her’s real name.

I responded, as did others to the insulting posts of the P Person simply because the comments were so insulting to the LG depositors. I hasten to add I am not an LG depositor.

To describe LG depositors in one post as being ” “supposedly educated people”, “hopelessly naive”, “The people wish to be deceived; let them be deceived”, “impossible to protect idiots from themselves”, and “blind ignorance” is the contribution of a poster, most would regard as being ignorant, and lacking the most basic of manners.

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104

MrsPinthepantry

Hi Frustrated Voter!

OK instead of your made up examples let’s look at some real world figures.

Northern Rock as of September 07 had £24Bn deposited with it from savers, however it had written £113Bn of loans.

When B&B was nationalised it had £20Bn of retail deposits and had written £42Bn of loans.

HBOS had in 08 circa £150Bn deposited with it but exposed to £235bn of UK loans + £41bn is the US.

Take the first example in isolation, 113 is not a ‘fraction’ of 24, the only reason these banks failed is that their OWN source of funding (loans/ debt from other institutions) dried up other wise they’d still be at it today, like all the other banks still are.

That’s how it works not how you have just explained it. The loans are a ‘fraction’ yes, but of the total assets (not just the depositors cash) but as keeps being proved the supposed ‘assets’ keep turning out to be worthless.

As I see it the only way to get away from this thinly disguised Ponzi scheme is to choose an Islamic bank.

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106

Greg

Mark, it may be that following David’s details that you are partially correct with your statment

“HMRC is demanding that banks provide details of all UK residents that have offshore accounts. Ask HMRC if you don’t believe me. ”

Of course it only applies to subsidiaries of UK banks, of which Landsbanki was not!

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108

Arnald

Mrs Pint
The ire wafting in your direction is to do with the nonsense argument that all people are required to know the ins and outs of a cat’s business end.
When folk go to buy a fridge or similar “showroomy” goods, they get advised on what’s what, depending on the questions that a better prepared purchaser may ask.
Since no one knew what the problems were, from consumer agencies to regulators – the alarmists tended to be out-of-vogue economists and the old ‘broadsheets’ journalists, as far as I can gather – it becomes daft that you expect that these badly treated customers could have pre-empted their loss by asking about various accounting and risk standards, and the true implications of what a deposit actually technically is.

To achieve the leverage it did, this supposed risk free model was reliant on a whole bunch of factors that were always just fingers-in-the-air based on whatever-they-were-saying theory, and the accountancy rules. Ratings, regulatory scope and reporting requirements seemed to be interpreted differently depending where you were in the chains and webs.
So something tedious for us, may well negate the obligation to an hand-off jurisdiction.

Would you honestly sign on to an internet account or savings vehicle and demand to know the structure that this deposit taker was facilitating? Would you ask about the parent company corporate governance and demand to see results of mandatory compliance audits?

So when buying a fridge, you may well be armed with Which? fridge monthly, and a host of specs that you want to match, but you still may not understand what actually keeps your milk cold. So if someone comes in and says that your fridge fluid needs changing, you don’t know the risk, either what the process is, or what the agent is. The geezer may well refill the fridge coolant with beer. Your last nights chinese goes off and you get salmonella poisoning. When investigated you discover a lack of freon (as was, still is?) that would make it work, and an abundance of beer – nice to see in the fridge (as per recommended guidelines), but not so in your fridge’s pipes.

Would you apportion the blame on the fridge owner or the fridge inspector?

Because a fridge isn’t just the act of setting your jelly and preserving your cheesecake, putting food in there cannot be a guaranteed cool outcome. If any one of the sub processes fails, your ham goes green.

Do I therefore need to be an expert in heat transference maths to determine what and where and how the most efficient exchange would take place? If the salesperson said “great for storing home maded soup” would you respond on how exactly it would cope if the soup were deposited at 5 10 15 20 25 degrees above optimal, and what the risk of rising ambient temperature would have on the integrity of last week’s left over chicken.

Do I need to labour this further from a customer pov?

Of course you understand, but you are implying that even this level of understanding would save you from regarding a product sold as ‘savings’ and ‘deposit’, as opposed to ‘investments’ and ‘liquidity provision’, as ‘safe’ as the stats were suggesting.

Got cash, will deposit, all banks say roughly the same, eenie meenie, go for the logo/don’t move after takeover/i know someone that works there/trade reputation, thanks, I’ll review in 3 months. Bye.

Too easy to say that a take over of a stable BSoc by an entity that looked and smelled like a player, but was really desperate for its decades of one to one relationship management and corporate trust in order to secure that essential balance sheet requirement should have warned of bad news.

So yeah, I agree somewhat with the general tangential argument, but not the fact that each of these LBGsy dep holders were individually responsible for their own detailed risk analysis. People that ought to have known, say Kaupthing’s board members in the IoM parallel fiasco, didn’t say anything and in fact encouraged the idea that nothing could go wrong showcasing simulated good trading health through share price rise; allegedly concocting internal deals to influence the market. Source-wikileaks

I can only imagine that the LBGsy situation was similar, considering how few people are actually involved with this level of global interaction type. Not more than a few thousand people are controlling our futures by the games they play.

NR/Lehmans, Iceland, Ireland, the Baltics and many more were dissolved or demoted due to these sort of hidden practices.

Will the administrator release the conclusions of its findings?

Sold a pup, by a pup, in a pup.
That’s how these guys feel. 800.

Not a few, or ten. But loads.
One really would expect the States to at least say some respectful words with a pledge of some sort.

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110

Mark

Greg

HMRC has been doing this for years now. Am surprised you hadn’t heard. It’s only a matter of time before HMRC extends its reach to all other banks show UK-resident customers have offshore accounts.

Fact remains that instead of continuing to slur Cheshire savers as tax evaders you should accept they fact that they are honest, hard-working savers – mostly pensioners – who merely deposited their life’s savings in a building society (alright, Guernsey operation of).

They paid tax:

in Guernsey, if resident there;
in Guernsey via the savings directive if non-resident;
or opted for automatic exchange of tax information and paid tax at home.

You seem to be obsessed with the subject of tax evasion so readers might perhaps be forgiven for wondering whether you yourself are up to date with your taxes?

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112

MrsPinthepantry

Hi Frustrated VOTER. I’ll take on Forbes, they perpetuate the myth of this system that continues to pull the wool over your eyes.

I think that link is overly simplistic and is deliberately misleading.

I actually find this part hilarious!

:- “Many U.S. banks were forced to shut down during the Great Depression because so many people attempted to withdraw assets at the same time. TODAY THERE ARE MANY SAFEGUARDS IN PLACE TO PREVENT SUCH AN INSTANCE FROM OCCURRING AGAIN, but the fractional-reserve banking system remains in place.”

Do you know how many banks have closed down in the US this year because of exactly this scenario?

I’ll tell you, it’s 106.
106 bank failures, or 106 textbook examples of
the failure of Fractional Reserve Banking.

But Forbes is ignoring this!

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114

Stephen John

Mark

I wonder what response you will get to your “Perhaps you should have warned the GFSC that, although authorised by them, some of their banks were endangering the reputation of the jurisdiction”.

Greg stated “Most of the clearers were against the idea because they felt that they were in effect underwriting the more “risky” banks on the island who were offering very high rates”

What a pathetic reason to resist a Depositors Protection Scheme. Silly me, I thought that Lloyds, Barclays etc are clearers who needed help recently.

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116

Frustrated VOTER

So MrsP, Forbes, one of the world’s leading, oldest, and most respected financial publishing co’s, is being “deliberately misleading”?! LOL!!!

Well, fine. I’ll leave you to take on Forbes then.

Maybe if you tell them that for supposedly educated people they are hopelessly naive financial illiterates living in blind ignorance, you can charm them into conceding that they’re wrong and you’re right….

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118

Mark

Greg

“this is getting tiresome!”

I’m not tired at all. It’s a good workout.

“You don’t know what you are talking about with regard to the HMRC. You start off by saying all Guernsey banks provide details, then you change that, then you say they are extending this to all banks…..”

I never said “all Guernsey banks”. Look back over the thread and you’ll see that you are wrong (again).

“As for your point on the DCS, I don’t think any of the risky banks around in 98 went bust so it’s completely irrelevant.”

Not irrelevant at all. Very relevant, in fact. The Guernsey authorities know that they should have implemented the strong recommendation of the Edwards Report – and should have pressed the banks to comply – but didn’t do so because they thought that Guernsey was too well regulated for any bank to fail.

“Finally, i’m not sure that the tax affairs of all Cheshire LG savers are in shape. It appears some of them have been needlessly wasting money by paying a witholding tax to Guernsey!”

Not a waste of money at all because they will get some it back when the CM finally does what is right: emulates the Isle of Man’s honourable actions.

Good workout. Look forward to sparring again on another thread.

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120

Stephen John

Greg

Isn’t the GFSC charged (legal obligation) with dealing with risky banks.

Still it can’t be reassuring for clients if insiders consider some of their brethren to be risky.

I can’t recall the opinionated members of the finance industry nor the ex Lloyds Bank man at Guernsey Finance warning potential investors of the risk. I wonder why?

I assume this is the correct version as in the earlier post you said “I was involved in the discussion”

The whole thing might not be appropriately called pathetic, perhaps irresponsible might be the word. Knowing of possible failure and doing nowt. Seems that caveat emptor screams at possible depositors.

But it does put the deposit taking scene in Guernsey in a proper perspective.

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122

Mark

Absolutely Stephen. Why would anyone want to place or keep their hard-earned savings in Guernsey now that we know that professionals such as Greg, who was personally involved in the discussions, have little faith in the riskier banks that the GFSC is doing nothing about, and the compensation scheme – discussed since the Edwards Report in 1998 and only rushed in just after LG collapsed – only covers £100m over five years when individual Guernsey banks have many times that amount in qualifying deposits.

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124

Arnald

“And no-one knew 100% that the Icelandic banks were going under”

Why not?

What’s the point of doing something for a living that you have no idea about?

What is an auditor?

Why are they not ashamed?
Or sacked?

Why did the MD say everything was fine the day before it closed? Were there any controls?

My old dog could have spotted it. Guernsey is nothing to these banks. A booking centre for casino gains, a granny bank for the losses.
Easy.

No tax, maybe even tax relief in other jurisdictions if they are booking the losses to a high tax jurisdiction, no questions and no regulation.

If we are well regulated then “well” and “regulated” have acquired new meaning.

Yet the same old people keep coming back with the same old nonsense. We are a secrecy jurisdiction that allows fast and loose practice, dressed up in legislation that undermines other democracies on our doorstep.

Transparency? Give me a break.

Sue the failed auditors. Sue the GFSC. Sue Barker.

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126

George

Mark,

“You cannot take the high moral ground until you move from tax-haven Guernsey to the UK or other jurisdiction where you would pay proper taxes.”

What a ridiculous statement. According to your reasoning people in the UK don’t pay proper taxes because there are higher taxes in Scandinavia, for example.

“Expat savers were forced to move their savings offshore by UK banks and building societies – but no-one is stopping you from moving”

Funny that I, living in Guernsey, have a current and savings account with a bank in the UK (which are there for mortgage related reasons). There are banks in the UK that accept deposits from outside the UK, the only thing is that their interest rates aren’t very good!

Mark, you are obviously an intelligent guy, but a lot of the statements that you present as fact are actually quite far from reality.

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128

George

Stephen,

You managed to completely miss the point there i’m afraid. Mark was insinuationg that Greg was not in a moral position to comment on tax issues as he lives in Guernsey. Please read thing properly before responding.

What do you base your statement that it would be more difficult to open a UK bank account today on? Have you tried? I only opened mine a couple of years ago and had no problem at all.

And I did not anywhere say that Mark was dumb in my post, so please don’t insinuate that I did!

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130

MrsPinthepantry

Hi darlings!

I see The Times agrees with me in it’s ‘Opinion’ column today:-

“…..But perhaps the biggest deterrent to new competitors ushering in a new era of better, fairer banking is customer ignorance and NAIVETY. In spite of some cynicism about banks, we still believe they owe us a duty of care and that they would not deliberately fleece us.”

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132

Stephen John

Greg

Thanks for telling me the ban on short selling of banks is no longer in place.

I actually told you that!!!.

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134

Mark

Greg

You said: “Mark, finally you seem to be coming around to seeing that the Guernsey finance industry is not that bothered about retail deposits!”

Not at all (yet again). That is what the Guernsey authorities would want us to believe in an attempt to limit the fallout from the Cheshire LG fiasco.

Reality is deposits have traditionally been – and continue to be – a pillar of the Guernsey finance centre. Just think how much money has been brought into the economy over many years, how many jobs and wealth created by the likes of:

Cheshire, Yorkshire, Scarborough, Skipton, Portman etc – not forgetting the banks, of course.

This has been the bread and butter of the Guernsey finance centre. Shame that you show such little appreciation and think savers are expendable tax evaders.

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136

Arnald

Greg
Where does the liquidity come from?

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138

Mark

Greg

You are wrong for the umpteenth time: I have been to Guernsey.

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140

Greg

Sorry Mark, I just assumed someone with so little knowlege of what are the main activities of the Gueernsey finance industry would probably have not spent any time on the island.

I hope you enjoyed your visit!

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142

Nat

To Mr/Mrs Springbok

After 140 entries on this discussion, I think its a bit late for you to be making comment. There has been interesting debate from many people on this subject. It may have deviated from the original GP article, but what is the harm in that. Maybe your just angry at Greg, as I dont see you moan at anyone else.

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144

Greg

Mark, come on now, I haven’t even mentioned tax today!

Plus you’ve been as off topic as I have, do you not agree?

PS Looking forward to seeing your stats on the demographic breakdown of LG depositors. It’s amazing that you know they all “worked hard and lived frugally”…..I hadn’t put you down as a drama queen!

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146

Greg

Mark, i’ve not consistently slandered LG savers. All I did was question those of you who were asking something in return for the taxes that you had paid to Guernsey, when the only taxes paid would have been a witholding tax paid as a direct consequence of not wanting details shared with the relevant tax authority. And I’m not the only person to point this out.

I haven’t made up rubbish (unlike some)…”worked hard”, “lived frugally”..it’s like reading the Daily Mail!!

I must admit, i’ve not had the time to ask your LG action group buddies for a breakdown of their members who were paying the witholding tax. Not sure if they’ll give the info to me anyway!

No comment on my points about what the real pillars of Guernsey Finance are?

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148

Mark

Precisely.

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150

Stephen John

Greg

Whether withholding makes sense is not the issue.If someone chooses to follow a legal avenue then you need really good grounds to even suggest evasion.

This rather holier than thou stance and concern about evasion doesn’t seem to fit with the support for avoidance schemes wthat might well be dodgy.

The usual answer about avoidance is that it is perfectly legal so buzz off. Well, withholding is perfectly legal and indicates that tax is being paid.

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152

David

Stephen John
You say: “Well, withholding is perfectly legal and indicates that tax is being paid”
Well, that’s only partly true. Tax at the rate of 20% is being withheld. If the depositor’s relevant tax rate is more than 20% then it leaves a shortfall, which would be prima facie evasion unless the whole interest was being declared by the depositor, in which case why elect to suffer the withholding tax ? The withholding tax at best is a payment on account of the overall tax liability. It is not and has never been full and final settlement of the tax liability.

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154

Greg

Stephen, with regard to the part of your post which you address to me, I can’t really answer directly because (a) my clients are all institutional and (b) when I did use to work with private clients I didn’t come accross any specific tax avoidance products/schemes.

In a general comment on your post, you seem to be misunderstanding the two areas. The witholding tax is obviously a perfectly legal option, but one has to question why someone who was being fully compliant with their taxes would choose this option.

As for tax avoidance scheme, I would have thought that if a scheme is legally considered evasion elsewhere then it would also be considered evasion in Guernsey.

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156

Mark

Greg

Haven’t visited this page for a few days. Can’t believe you’re still banging on about the withholding tax and alleged tax evasion – instead of joining the call for a public inquiry into the fiasco that has seriously damaged Guernsey’s reputation.

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158

Stephen John

David

What must confuse many is the different approaches where those choosing the legal withholding route are assumed to be tax evaders, whilst those proposing schemes under the title of tax avoidance, seem to avoid and question of intent, regardless of the fact that their action is to avoid paying taxes, and the simple reality is that schemes caled tax avoidance are often regarded as tax evasion when tested.

It seems to be the case of call it tax avoidance and no one asks any questions. Choose withholding, and it appears an almost automatic view that it is for purposes of tax evasion.

Your comment “The legal act is perfectly fine. No crime has been committed. The illegal act is not fine. A criminal act has been committed.” should apply to both avoiders and withholders until you have good evidence of illegal intent.

To assume at first sight illegality for one option (withholding) and assume legality for one (avoiding)just seems to be rather unfair.

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160

Stephen John

Greg

I know far to well what goes on in the finance industry.

One thing about having been involved in FE in Guernsey is what you are told by students and read in projects.

Seems clear that I know more of went went on than you!!!

Your last point about someone moving to Guernsey being regarded as tax avoidance. You may well be right given the rumour about the UK revenue looking far harder at tax avoidance and motive behind it.

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162

David

Stephen
I have previously answered your question to Greg on another thread but I will repeat it.

Opting for the withholding tax is legal. But it automatically raises or certainly ought to raise suspicion as to the individual’s motive for doing so. The banker is therefore under a duty to satisfy himself that the client is not intending to evade his overall tax reporting obligations. If he is satisfied that the client is intending to comply then its legal, notwithstanding that its very odd. If the banker has any doubts about the client’s intentions or reasons for acting oddly then he must report the client as in that situation the client is probably acting illegally.

Its not black and white and never will be because different clients will have different reasons for accepting the withholding tax option. Its not a “one size fits all”. But it is more likely than not that the client who opts to suffer the withholding tax is looking to evade paying the balance of his tax liability, in my view.

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164

Arnald

Whereas before no one knew anything about anyone because of the near opacity of our system. It took a fudge from the EU to get this far.

No one would have been talking about avoidance if it was such a trifling detail on the vastness of international business. The very fact that teeth are slowly being pulled and the resultant howls of indignation get childishly shriller is a clear sign of gum disease, a marker of general ill health.

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166

Greg

Stephen, if a scheme is “kosher” then it is legal and you wouldn’t suspect tax evasion. You would still declare your participation in any scheme on your tax return.

The issue with the EUSTD is that by not choosing to have automatic exchange of details suspicion is raised that the offshore account is not being declared (as it generally makes no financial sense to pay the witholding tax if you are declaring your offshore account).

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168

Stephen John

TL

Just for the record schemes labelled avoidance are sometimes evasion.

Or perhaps that happens in other tax havens and never, ever in Guernsey.

Mind you it would take some courage to tackle a lawyer and a rich and well connected client and suggest their plan was evasion.

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170

David

Stephen
Your comment “just for the record some schemes labelled avoidance are acty evasion” is a bold statement and I would ask you to elaborate please.

It rather suggests that you are well out of your depth on the topic.

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172

Stephen John

David

If you are going to quote me at least have the courtesy to be accurate.

You ought to read again what I said and think about it before making insulting personal comments.

Greg

Try looking once more at my comment “Mind you it would take some courage to tackle a lawyer and a rich and well connected client and suggest their plan was evasion”.

Who am I referring to in the post? Let me tell spell it out, it refers to those who administer schemes and not HMRC.

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174

Toby

Springbock

When you deposited you money with the Chesire there was no depositors protection scheme in Guernsey.

When Lansbanki took over your account there was still no protection scheme. There were however guarantees from Lansbanki’s parent companies and upwards to the Icelandic government. If Chesire made no such guarantee then, on paper, you were in a better position when Landsbanki took over. If they did, then your position stayed the same.

Landsbanki was a more liquid bank ( in terms of actual cash holdings )than any of the high street names, including Chesire.

Landsbanki collapsed from the top down, taking all the guarantees with it. I hardly think you can blame the GFSC for the collapse of the Icelandic economy.

Yes you are angry, you lost all your money, and you want someone to blame. May I direct you in the direction of Iceland, who made you a guarantee that they couldn’t keep. And not the GFSC, who made no guarantees whatsoever …..

At the end of the day, for whatever reason, YOU chose an account in Guernsey that had no compensation scheme – and YOU have to live with the consequences, unfortunate as they are

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176

David

Stephen
Where’s the confusion ? You actually said:
“Just for the record schemes labelled avoidance are sometimes evasion.”
If you are denying that you said that, then please re-read your posting of 12.32pm on 7th November.
I didn’t mean to be insulting and sorry if it came across that way, but I’ve spelt out the facts to you on numerous occasions and you don’t seem to have grasped the legal difference between avoidance and evasion. If by now you haven’t grasped it, then my view was and is that you are out of your depth on the subject because it cannot be explained any more clearly.
Either that or you are deliberately asking Arnald-like provocative questions which I must admit seems unlike you.

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178

scarlett

David, Stephen – please, get a ROOM.

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