WHEN the theme of this year’s Institute of Directors annual conference was announced – would you invest in Guernsey plc? – we suggested that a more accurate question would be, are you allowed to invest here?

The reason was that the island’s financial services sector – never the most outspoken – was increasingly concerned that unannounced, unheralded and undebated, the regulatory screw was being turned with an enthusiasm that was detrimental.

In the months that have gone by, that concern has mounted and the mood has turned into one of angry resentment and the belief is that the Guernsey Financial Services Commission is increasingly hostile to business and employs a tick box approach to its job so that it is blind to the pressures of running an institution and employing staff.

The relationship between regulator and those being regulated has actually broken down and the commission is now seen as a barrier to new business coming in.

An indication of the seriousness of the situation was provided by sponsor Carey Olsen’s managing partner imploring the commission not to regard the sector as a ‘them and us’ situation and to work together for the benefit of the island.

The other indication of the scale of the problem was the chief minister’s announcement that government is to play a greater part in saying how the island should be regulated.

Given the difficulties inherent in politicians appearing to have any involvement in an independent regulator, it says much about how bad things have become and how the complaint that regulation now exists for its own purpose appears true.

Clearly, the island’s financial services sector has to be controlled. Without internationally acceptable standards of behaviour it cannot expect to have access to its key markets.

That said, regulation needs to be the lightest possible to keep Guernsey in the premier division of offshore centres and its economy thriving – and not simply to earn the commission’s staff unflattering nicknames because of the savagery with which they carry out their tasks.

What’s important is the well-being of Guernsey plc and it is unfortunate that the manner of regulation here has become a public issue.