Conduct Panel? Bring it on, says chief minister
Tuesday 7th December 2010, 11:30AM GMT.
CHIEF Minister Lyndon Trott has challenged the Landsbanki Guernsey Depositors Action Group to take a complaint against him further.
The group is unhappy after Deputy Trott (pictured) told the States in November that some commentators believe depositors could get more than 100% of their money back.
It is now considering making a complaint to the States Members Conduct Panel.
Deputy Trott was responding to questions by Deputy David De Lisle, who has championed the depositors’ case politically.
In an emailed response Deputy Trott highlighted comments he made in debate and said: ‘I would agree that this matter should be considered by the States Members Conduct Panel and encourage you accordingly.’
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Surely it is about time that this whole matter was given a proper airing rather than Mr Trott conducting a one man show and stifling debate with his favourite mantra about tax payer’s money. There are far too many questions that have been left unanswered about the run up to the collapse and the actions of both the british and guernsey governments during that time and since. It is not so much a question of who might have to put their hands in their pockets but what actually happened that is important
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Just to clarify the above article a little more, this is the email that was sent to all deputies:
2nd December 2010
Dear Deputy,
The Royal Court appointed Landsbanki Guernsey Administrators have clearly felt obliged to issue a public comment in the wake of statements regarding the anticipated levels of cash returns for Landsbanki Guernsey depositors, made by the Chief Minister, during the States of Guernsey debate about the Depositors Compensation Scheme held on 25th November 2010.
The Chief Minister is on record as having stated, twice, that depositors may receive greater than 100% of their deposits returned – statements which, you will note, the Royal Court appointed Administrators diplomatically discount as ‘speculation’.
Below is a copy of the Administrators’ statement as well as a transcript of the relevant part of the Chief Minister’s address.
The LGDAG feels obliged to defend the actions of the Royal Court appointed Administrators, and in doing so reminds Deputies that the Administrators have estimated that depositors are likely to recover 85-91 pence in the pound over years, a range that they reaffirmed in their previous public release just two weeks ago and of which the Chief Minister was undoubtedly aware.
One can only speculate as to why the Chief Minister chose to contradict and second-guess the Royal Court appointed Administrators by failing to inform Deputies of the Administrators’ publicly announced figures and, instead, repeatedly emphasised the alleged opinions of unspecified ‘commentators’ in his statements to the Assembly .
The transcript of the relevant part of the Chief Minister’s address demonstrates that he failed to lay out the facts before the States Assembly in favour of, for the most part, pure speculation – presumably in order to denigrate the address of Deputy DeLisle. The LGDAG considers this totally unethical and unacceptable as, it hopes, do all Deputies, as it appears to be a deliberate and unacceptable abuse of a trusted position of power. LGDAG feels this issue should be referred to the States Members Conduct Panel and will be giving this further consideration.
Yours sincerely
Gary Blanchford
Deputy Chairman, LGDAG
For and on behalf of the LGDAG
DeLoittes statement on their website.
http://www.deloitte.com/uk/landsbankiguernsey
Landsbanki Guernsey Limited (in Administration)
1 December 2010
We understand that there has been some reference in the States of Guernsey to speculation in relation to the estimated ultimate recovery to creditors of the Bank.
The Joint Administrators would like to draw creditors’ attention to their fourth interim report, which states that their estimate of the ultimate recovery to creditors of the Bank remains at between 85p and 91p in the pound. However, it should be noted that these returns are subject to a wide range of factors which may result in the actual return being lower or higher than this range. For example, should the legal action in Iceland be successful then the recovery may increase, however the Joint Administrators remain cautious about the prospects of success.
STATES DEBATE ON THE AMENDMENT TO THE DEPOSITORS COMPENSATION SCHEME
25th NOVEMBER 2010. A transcript of part of the Chief Minister’s speech
Deputy Trott: Sir two things have brought me to my feet, the first is Deputy DeLisle’s comments, he says that Guernsey has failed miserably its depositors, well sir I felt obliged to defend the actions of the Royal Court appointed Administrators, whose job it is to deal with this matter, and in doing so remind this assembly that they have suggested that depositors are likely to recover in excess of 90 pence in the pound, and I say in excess because I am aware that there are some commentators who have followed this closely who believe that that figure may in fact exceed 100%, so for Deputy DeLisle to stand up and insinuate that landsbanki has lost £117 million, when he is aware of the fact that the depositors have already received nearly 70pence in the pound back is quite simply sir outrageous and I’m sure he’ll be the first to jump to his feet and apologise to this assembly for attempting to mislead the house.
Deputy DeLisle: Sir can the Minister correct the fact that they haven’t received 70pence in the pound.
Bailiff: Sorry, what did you say they have received.
Deputy Trott: I did say approaching 70pence, it is 67.5 pence in the pound so far and expectations are that that number will be , as I say, close, if not , in the views of some commentators, greater than 100%. Lets be very clear about that, the situation is nowhere near as bleak as Deputy DeLisle seeks to paint.
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May I say how appalled I was at the comments made by the Chief Minister, Lyndon Trott, in the recent States meeting regarding the Depositor Compensation Scheme.
Rather than the Chief Minister claiming Deputy DeLisle was guilty of misleading the house, I would suggest that it was the Chief Minister, himself who was, in fact, not only misleading the house and the general public of Guernsey for political gain, but also, falsely, raising the hopes of all Landsbanki Guernsey depositors that they would eventually receive more than 100% of their savings.
To make the statement twice “that there are some commentators who have followed this closely who believe that figure may in fact exceed 100%” without any substantiation whatsoever, is both totally irresponsible and stretching political licence to the very limit.
The Administrators, Deloittes, have subsequently had to put out a statement on their website to allay the mixed emotions from depositors and to re-affirm their return of 85-91p in the pound estimation.
In order to heal the deep divisions between himself and the Landsbanki depositors the Chief Minister would be better to honour his long- standing promise of a meeting with them, rather than further aggravate them with this recent taunt.
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…did Lyndon T. actually say “Bring it on” or was that just a jouranlistic touch….if the former he is already sounding as yobbish as dear old Mike Torode who felt phrases like “the little toe rags”, when referring to prisoners, was appropriate political language.
A bit of sophistication in the use of English grammar was really too much to expect from Torode, but are we now saying our chief minister has the same problem…oh hang on, I’m getting a text message from Barry Brehaut, who seems to think I may be right in my speculation.
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Vic – now that they’re talking about replacing the Bailiff with a new speaker for the House, perhaps we could ask Michael Buffer?
He could begin every debate in the House with “Lets get ready to rumble!”
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A correction to the Press article at the top. The Chief Minister’s response to the above e-mail to all deputies was as follows and the transcript in his reply was a reduced version of exactly as sent to him by the LGDAG including the highlighted areas. He had purely copied and pasted them back into his reply. This forum unfortunately does not allow highlighting.
Chief minister’s reply to LGDAG email copied to all Deputies & Mike brown 3rd Dec 2010 1429hrs:
Dear Mr Blanchford
I note from your message the following sentence;
“LGDAG feels this issue should be referred to the States Members Conduct Panel and will be giving this further consideration”
Helpfully you include the following transcript of my words in the Assembly;
There follows and exact copy of part of the transcript ( 2nd entry in forum) sent to him in the email, Followed by:
I would agree that this matter should be considered by the States members conduct panel and encourage you accordingly.
Regards
Lyndon Trott
LGDAG responded to the above comments 3rd Dec 2010 1443hrs:
Dear Deputy Trott,
I can assure you that should we decide to take that action, our report will be contain comprehensive, accurate information, not speculation.
regards
Gary Blanchford
Dep Chairman LGDAG
For and on behalf of the LGDAG
No further communications have taken place.
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It seems you have an equally arrogant and dismissive Chief Minister in Guernsey as we do in Jersey.
Perhaps you would care to enlighten us further Mr Trott as to where your information came from, because at no time has my daughter, as a depositor even heard the words 100% mentioned.
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As a Landsbanki depositor / Cheshire Guernsey, I confirm that WE ARE STILL AWAITING OUR LONG LOST SAVINGS! Is Mr. Trott living a ‘dream’ or does he know something we do not. A 100% is what we want, – that is what we lost! We don’t need to be subjected to press hype – just the truth will do.
Oh, by the way, just what is the truth……..?
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Could the Chief Minister confirm where he gets his information from when he says “that some commentators believe depositors could get more than 100% of their money back”, or are his words simply empty rhetoric.
From my understanding of Deloittes website these commentators do not include the Administrators who are directly acting in this case.
I would like the Chief Minister to reply please in a concise manner, in his capacity as an elected Deputy of the States.
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The Questions the Chief Minister should be answering are:
Why is the CM contradicting/second-guessing the LG Administrators?
Why is the CM presenting to the States what the Administrators have dismissed as speculation, instead of the Administrators figures?
Why has the CM obliged the Administrator to spend Depositors money to put out an announcement correcting his speculative comments?
Why doesn’t the CM have confidence in the Royal Court appointed Administrators? If he had he would have used their figures.
Why doesn’t the CM issue a correction and admit the figures are 85-91p?
Who are the CM’s “commentators” who have provided him with information he obviously feels is so accurate that it must be passed to the States assembly in preference to the Administrators figures?
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Rule 1 of politics adroitly managed by Trott – “never let the truth get in the way” of personal ambitions and policies.
If however he is convinced that failed Landsbanki will pay out in excess of 100%, why has he missed the chance to make some profit for Guernsey States – had Guernsey followed the same path as the UK and Netherlands Govts in paying out depositors, the States would now be in a nice position to reap the profits over and above the 100% of savers money.
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The Chief Minister has shown once and for all the contempt in which he holds the Depositors of the failed Guernsey regulated bank Landsbanki. Not only have we had to put up with two years of uncertainty and stress but now he wants to rub salt into the wound with careless and inaccurate talk.
Nothing less than an apology will do Chief Minister so bring it on!
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Mr. Deputy Trott,
Your comments to the States meeting of Deputies on 25 Nov last,seems to have caused some confusion and indeed, not a little anger amongst the savers of LG.
You do not name or even hint at the commentators in whom you seem to have such belief, yet you would have us believe that you are prepared to defend your comments before a Conduct Panel.
This could be avoided…I will put to you a proposition. Extend the bounds of your retro DCS, loan the outstanding loss amounts to myself and all former LG savers to the sum of 100% plus lost interest. For my part, I undertake to repay to the states of Guernsey, the loaned amount to 100% + interest plus any amount received being more than that.
Should all other LG victims agree to the same undertaking, some little profit could go to Guernsey and could be put to good use towards other local projects, such as schools, libraries, museums…
Yours Sincerely,
Ken Dickenson
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Please can Lyndon Trott tell us all where this ‘more than 100%’ recovery information came from?
We have been waiting for over two years and paying millions of pounds to the state appointed administrator to claw back our life savings, to date we have received 67.5%.
The administrators have told us that we could receive between about 80 – 90% of our savings back, depending on market conditions.
Suddenly, after all this time of supposedly offering assistance to the administrators, Trott has now contradicted them without giving any credit to the source of his comments.
Can this person stoop any lower?
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@CMDegan
Successful politicians are those that dupe us all! Mr Trott just failed that hurdle
But remember, before you spend or invest do due diligence first.
The wallpaper paste was already failing in USA before it collapsed. For that we have to blame banks in Europe who thought it was just a glitch that would go away!
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The gfsc made serious errors and have cost people lots of money,some their life savings,have they learned lessons ?
The Glanmore property fund a guernsey reg fund is losing millions of pounds,investors have had their assets blocked and yet this fund is still being promoted by savilles guermsey ltd
Another guernsey shambles,but still the gfsc stand by and do nothing
WHY ?
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When you invest or deposit your money you do so at your own risk.
We have been through exceptional circumstances over the past three years and now everybody wants to find a scapegoat.
I was offered the opportunity to deposit with Landsbanki but who in their right minds would go for an extra 0.5% interest in a bank from a tin pot country with only 300,000 inhabitants which relied solely on a depleting fishing industry for its income?
The Icelandic people have shown their true colours by voting not to repay the banks depositors. They benefitted from a vastly improved standard of living. Did they not question where all this wealth was coming from?
I note numerous people want to blame the GFSC but it is not their fault there is no Depositors Compensation Scheme in Guernsey. It is the States of Guernsey and, therefore, the people of Guernsey who decided not to have a DCS. Even now the banks in Guernsey will only fund a DCS if there is another bank collapse. they tried to fund a contributory DCS scheme but none of the banks would pay up. the States of Guernsey need to get firm with these banks.
The Landsbanki literature quite clearly stated that there was no depositors Compensation Scheme in Guernsey and yet every body piled their money into the bank just so they could get another 0.5% interest. I did my own due diligence and decided the risk was not worth it. i am not being smug as I invested in equities and lost more than the 70 – 80% the Landsbanki seem certain to recover.
Time for the Landabanki depositors to stop whining and realise that they should have done their own research before depositing with the bank. Just because a bank is licensed is no guarantee against failure.
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@ Ken Dickenson
the Landsbanki documentation quite clearly stated there was no Depoistors Compensation Scheme in Guernsey.
Why should you now get special treatment?
You knew you were taking a risk. This was a bank from a very small island ( Iceland )that has no industry to speak of to support the lavish lifestyle of its residents.
Did you not stop to think why are they paying higher interest than other banks? Did the BCCI debacle not teach anybody that such institutions cannot be trusted?
You should of undertaken your own due diligence before depositing and read the warning sign clearly displayed on landsbanki literature that there was no DCS.
When banks start loaning money at over 100% of the value of the property it is secured on then they are speculating and it is time to move your money out and look for safer havens.
I note that a number of banks are now creeping back up to 95% mortgages. a dangerous trend as house prices continue to slide.
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Lyn
So you were going to put your money in the bank but decided to buy shares? and you also did your due diligence. So in effect you went from putting it where it should have been very safe to gambleing, and you call that due diligence? :)))
And please stop telling people things like they all just pilled in just to get the extra .5% when you haven`t got a clue why they put their money there.
Just for the record, banks are obligated to give you back all your money which is not the case when you invest
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Lyn,
nearly all of your comments show that you have little knowledge of the literature that has shown in the past that there was a lack of due dilligence by the GFSC who allowed unsigned guarantees to be used in advertising by landsbanki, which proved to be valueless, allowed 30million to be upstreamed to Heritable, a sister to landsbanki islands hf in iceland and reliant on them for funds. Later said that letters of comfort wern’t worth the paper they were written on.
It goes on and on, Cheshire customers who had bonds were not allowed to cash in until maturity, by which time it was too late.
I’m afraid you are arguing from a lack of knowledge of the many intricacies of the situation.
This is why the Landsbanki Guernsey Depositors wanted a full independent, select Committee type inquiry to be held in Guernsey, as held in the Isle of Man, The UK Treasury, The UK justice Committee, and the Icelandic truth report. It was and has been turned down by the States of Guernsey, so the truth will never come out from a fully independent report, which we would have been happy to abide by once all the facts had come to light.
The Promontory report was not independent, it was instigated by the GFSC, under their terms of reference, and paid for by them, it was an internal report with no independent witnesses.
There are many things to question over this whole debacle not least the opaque, secrecy of a Non transparent Guernsey Government.
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I did my due diligence when I invested my life savings in the Cheshire Guernsey Building Society.
When Landsbanki Guernsey bought my bank in 2006 I again did my due diligence and after reading the following that I was sent by the bank:
Celebrating 120 years of operations, Landsbanki is a leading Icelandic financial institution with total assets of 18.6 billion and shareholders equity of 1.3 billion at end of June 2006. With the leading market share in all major segments of the Icelandic financial service sector, including above 30% in deposits and domestic lending, Landsbanki has positioned itself as Iceland’s primary source of general and specialised financial services to individuals, corporate entities and institutions.
Building on its strong foundation in Iceland, Landsbanki has successfully extended its services into new markets. Landsbanki and its subsidiaries have offices operating in all major financial centres of Europe, as well as New York and Halifax. Through its extensive distribution network, Landsbanki has a strong platform to deliver targeted financial services based on local expertise.”
In addition to this we were sent a written Parental Guarantee (that turned out to have not even been signed – thank you to the GFSC for overlooking this)
“For your your comfort and security, Landsbanki has given an undertaking to honour all the obligations of Lansdbanki Guernsey Limited”.
This unsigned guarantee was used extensively in the bank’s literature, “as authorised by the Guernsey Financial Services Commission”.
I deposited my life savings into Guernsey because, as a financial services centre, I believed it would maintain high standards of ‘financial services’.
Whereas, in reality, all that I got were people who surrounded themselves in jargon that was based on nothing and were quite happy to walk away from it all when the ‘promises’ they made were proven to be worthless.
Bring it on, he says – Lock him up, I say!
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Lyn
Which regulator in its right mind would authorise the sale of safe UK Cheshire savings to “a bank from a tin pot country with only 300,000 inhabitants which relied solely on a depleting fishing industry for its income?”
As you say, there was no Depositors Compensation Scheme in Guernsey but you forgot to mention that this is because the Guernsey authorities insisted for years that Guensey banks were too well regulated for a GFSC-regulated bank ever to fail.
Instead Guernsey lured depositors by flaunting 100% Parental Guarantees, which we now know were not worth the paper they were written on. In the case of LG it wasn’t even signed and neither the Directors nor the regulator bothered to check that it had!
You invested in equities and lost more than the 70 – 80%? Time for you to stop whinging.
John
Depositing in the UK Cheshire was certainly not considered “taking a risk”. What WAS a gamble was authorising the sale of the safe Cheshire savings of many Guernsey pensioners to “a bank from a very small island (Iceland)that has no industry to speak of to support the lavish lifestyle of its residents” (your words).
They were not “paying higher interest than other banks”. 4.25% when I made my deposit at the Cheshire, which was average at the time.
Savers only sin was not to immediately move their deposits the moment they discovered that the GFSC had sanctioned the sale of of the Cheshire to “a bank from a very small island (Iceland)that has no industry to speak of to support the lavish lifestyle of its residents”.
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We need to get back to the subject of this forum and probably one of the main causes of discontent in this whole sorry episode.
Guernsey’s Chief Minister and his comments to the States Assembly that commentators have informed him that depositors may get back greater than 100% of their deposits, it appears he places more credence with his commentators than the Administrators (Now liquidators)of Landsbanki Guernsey.
This evening, the following was sent to all Deputies, but mostly for the attention of the Chief minister.
Dear Deputies
We do not intend taking up any more of your time than is necessary, but felt that yesterday’s Royal Court decision on the liquidation of landsbanki Guernsey and the figures that came out at that hearing reinforce our complaint against the Chief Minister’s speculative statements to the Assembly during the DCS debate on the 25th November 2010. He will have been well aware of the correct figures in the matter. We also believe that the Chief Minister owes it to the States Assembly and the Landsbanki Guernsey depositors to answer the following questions in the interests of honesty and transparency.
The Questions the Chief Minister should be answering are:
Why is the CM contradicting/second-guessing the LG Administrators?
Why is the CM presenting to the States what the Administrators have dismissed as speculation, instead of the Administrators figures?
Why has the CM made speculative statements that have obliged the Administrators to spend time and effort to put out a public announcement to dismiss them?
Why doesn’t the CM have confidence in the Royal Court appointed Administrators? If he had he would have used their figures.
Why doesn’t the CM issue a correction and admit the figures are 85-91p?
Who are the CM’s “commentators” who have provided him with information he obviously feels is so accurate that it must be passed to the States assembly in preference to the Administrators figures?
We look forward to his replies,
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@ M Flynn
I had my money in Cheshire but immediately moved it following the sale to Landsbanki.
I did my research and decided Landsbanki was a much higher risk.
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@ bcb & Latchford
All I am saying is you should have done your own due diligence and stop blaming everyone else but yourselves for putting your money in a bank from a country with little industry to support its lavish lifestyle.
Icelandic companies were also buying up the UK High Street. where were they getting the money from?
I am not whinging about losing money on the stock market. I took the risk and lost but I have not started a campaign against my broker for not stopping me.
Your beef is that you you deposited money in a Guernsey licensed bank at high rates of interest and thought it would be safe. banks are like any other business and are subject to market fluctuations. Surely you must have read the accounts of Landsbanki Guernsey and seen that there were huge parental loans?
Were the GFSC to know that the parent would be unable to repay the loans? They probably should have restricted the amount loaned to the parent to a greater degree but it is my understanding that the regulators in the UK and Iceland failed to identify the problems at the parent and so are equally to blame.
You are getting back around 75% ( or 100% according to Mr Trott) so what are you moaning about?
If you put all your money into Landsbanki then more fool you for not spreading the risk.
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Lyn,
Not worth responding to, my previous post stands.
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The Chief Minister needs to reply to the Landsbanki Guernsey depositors questions on this statement that he has made in the States Meeting, these are perfectly reasonable questions to ask of any politician that has regard for transparency in communicating with the very people who elected him in the first place.
The publicity that this matter has generated locally has now been picked up by the national media and features in the Telegraph.
http://www.telegraph.co.uk/…/Landsbanki-Guernsey-depositors-chal...
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Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness, that most frightens us. Your playing small does not serve the world. There is nothing enlightened about shrinking so that other people won’t feel insecure around you. We are all meant to shine as children do. It’s not just in some of us; it is in everyone. And as we let our own lights shine, we unconsciously give other people permission to do the same. As we are liberated from our own fear, our presence automatically liberates others
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Lyn
Hate to burst your bubble dear but i dont and never have had any money in that bank (where did i say i have?).
So you see i wasen`t moaning, i just had an opinion on your post nothing more.
And i think that getting back as you say 75% of their money really is something they have the right to moan about. I bet you moaned when you lost your bet on the shares you bought even with your due diligence. Its not the same though because you are aware that there will be a very high probability of either getting back more or less of your initial investment.
Is that what you expect from a bank deposit?.
I just love all the so called “experts” comeing out with advice AFTER the event. Wow i`m so clever this would never have happened to me!.
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PB
I see you are cutting and pasting again.It wouldn’t be quite so pointless if it was in any way relevant to the subject
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Ray
Its very relevant you obviously lack the mindset,i assume you will be one thats staying ?
You have all the classic hallmarks of a “we are the best outlook”
I will say a prayer for you on Sunday
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PB
Call me old fashioned but I had to Google the term trolling today to see exactly what it meant
There are many similar explanations but one I particularly link to you is ‘An anonymous p**** who deliberately winds up people on the internet just because he can get away with it’
Apparently trollers get their jollies by counting up the number of replies they receive.It doesn’t matter at all whether they are good or bad,a dozen bad replies trumps half a dozen good ones
It suggests that the only cure is not to read a known trollers posts and certainly not to reply to them
I think I will be taking that advice
When you pray for me on Sunday I hope it is from off-island as you promised
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PB Falla’s quote is indeed most relevant.
It has come to be associated with standing up against authoritarian regimes.
The famous passage from A Return To Love is often erroneously attributed to the inaugural address of Nelson Mandela.
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Iceland to pay for Landsbanki UK
http://www.bbc.co.uk/news/business-11962885
Note the bit that says that the UK Gov put £2Bn into the DPS knowing that the bulk of the debt would be cleared when the assets were sold.
I find it uncomfortable knowing that the States of Guernsey could treat its residents with so much disdain.
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blokeinlondon
Im pleased to hear you embraced the comment,however people like Ray are still in the dark ages and lack vision unlike you and I
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I’ve been away for 20 years and I’ve come back with the same values of fairness; listening and independence that were formed in Guernsey in my youth when I left. Unfortunately the values of our government have become authoritarian and discriminatory and we need to get them back on track.
Yes your post resonated with me.
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Well done to Iceland for agreeing to pay back the Icesave deposits from the UK and the Netherlands.
So when will Guernsey make a similar agreement with Iceland?
Is this what Lyndon Trott was referring to about his 100% or more comment?
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Lyn
If you went to your bank cash point to draw out, lets say £100. £75-00 came out in cash and when you went into the bank you were told; we are only giving £75 for a £100 withdrawals today, even though £100 will be deducted from your account.
I’m sure you would say, Oh fair enough, wouldn’t you?
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Lyn:
I am at a loss here. A financial institution produces marketing literature that boasts an underwriting by the GFSC, and you say that people had not conducted their due diligence properly. Are you therefore saying that in running the due diligence tests individuals should have expected Guernsey to let them down and renege on a promise that they allowed to be published to clients of a financial institution operating under their jurisdiction?
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Sadly for the people who had money invested with Landsbanki didnt realise that the gfsc is a mickey mouse organisation
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Gary Blanchford – except that was not the situation. You have not gone along to a trading bank to ask for a withdrawal and been told that you will only get £75 per £100. You were unfortunate enough to have banked with an institution which had gone bust because of the actions of its parent. You are a creditor of a bust institution. Trying to make out that you are like a someone who went to Barclays last Saturday does not help your argument.
Truth Man – except that they did not produce material to say that they were underwritten by the GFSC.
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TL:
Forgive me, I am not up on my technical terms and this certainly is not an area that I know a great deal about, but it does seem to me that there has been some mis-selling on the basis that GSFC were being used to promote something that they had no intention of following through on. Or is that not the case?
Equally, I do not see how Gary’s scenario is not helping his argument. Is it not the case that people deposited with Landsbanki and are now looking at getting 75% of their deposit back?
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Any how I want ALL my money back, and SOON.
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Truth Man – the GFSC regulated the bank, but no financial services regulator underwrites an institution or promises that it will never go bust. Nor does it promote any financial institution.
The GFSC did not fail to deliver on a promise, as it made no promises. In hindsight, it should have prevented the full amount of the upstreaming, but as far as I am aware all previous bank collapses have occured due to issues within the operations of the bank that collapsed, not because a healthy bank was brought down by its parent. So should they have told LG to change their operational model to cover a risk that, at the time, appeared to be so remote that it had not previously happened?
As for Gary’s scenario, it conveniently ignores the fact that the bank had gone bust. If you trade with an entity that goes bust, you will lose something, whether you supply them paper clips or are a bank depositor. The risk of a bank collapsing is very low, but it does happen from time to time. The mere fact that a depositor has been burnt is not in itself indicative of there being a “wrong” done to them. Atributions of blame need to be on the basis of actions and deeds, not consequences, but most of the discussion simply looks at the latter.
I don’t blame the depositors as it was easy to get caught out, but some people seem to assume that because something went wrong the regulator must have been at fault and that the Island must pick up the tab. I don’t think that is right either.
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Please note that in my above post regarding the story being covered by the UK press, the link is broken and the correct one is :
http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/8189903/Landsbanki-Guernsey-depositors-challenge-islands-chief-minister.html
To date, I know of no response whatsoever from the Chief Minister, Lyndon Trott as to the questions asked by the DAG of Landsbanki Guernsey regarding his more than 100% claim.
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TL:
Thanks for the info. One more question – was there not an implication that Guernsey would support financial institutions under its supervision?
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Truth Man – No, never. Financial regulators are not responsible for the financial success or failure of regulated entities, they just seek to ensure that they run their businesses according to certain rules and within certain criteria. Businesses succeed and fail for various reasons and it is not the regulator’s job to run the business for them, provided that those rules are followed and criteria are met.
The whole point about why Depositor Protection Schemes are needed is because banks do go bust occasionally, despite the best efforts of regulators. If regulators were there to guarantee that the banks never failed, and to support them or underwrite them if they do, there would be no need for a DPS.
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Terry the telling part of your posting is the phrase ” despite the best efforts of the regulators” as in this case it seems that the efforts of the regulator were less than adequate and well below what could reasonably be expected by the depositors in any bank in a regulated jurisdiction. The information already in the public domain about the lead up to this fiasco points to some fairly serious failings.When all is finally revealed I suspect that the gfsc were just not up to the job but that will be little comfort to the guys that lost their money as many, sadly, will no longer be here by then !
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TL:
Thanks again for the info. It does kind of put into context the expression “as authorised by the Guernsey Financial Services Commission”. It makes me wonder what, if any, comfort this should give to a depositor. If other countries (with their own versions of GFSC) are fully reimbursing those who lost deposits it makes me wonder if Guernsey really is such a wise investment choice.
I recall seeing something in relation to IOM where in the case of insurers (FP, Zurich for example) they do guarantee company security – in effect underwriting. Or have I got the wrong end of this stick too?
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Truth Man – other jurisdictions had DPSs in place and also the UK paid out billions to shore up its entire banking sector, not out of some altruistic idea of protecting individual depositors, but because the consequences of not doing so would have been financial meltdown. If an individual bank went bust in the UK, with no knock on effects, you would not see the government topping up the DPS to fully reimburse depositors.
Is Guernsey a safe place to deposit? The real question (both before LG and since) is whether the particular bank is a safe place to deposit. Pretty much all of the retail banks in the Island are now in the “too big to fail category” so that the UK would never let them collapse. If you bank with HSBC it really makes no difference whether your account is in the UK or here, as the bank is not going anywhere.
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Truth Man, I think if you asked members of the Kaupthing Singer & Friedlander IOM action group you might find that the guarantee offered in the IOM is not perhaps as good as it may seem.
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TL
that was not really the purpose of my scenario, In january we hope to get another 7.5%. We will then be 25% down on our orininal deposits. Whether the bank went bust or not, I was putting accross that no one would accept that situation and will always push for 100% of their money back.
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We are still waiting Mr Trott – Where did you get this information from informed commentators suggesting more than 100% return for the lost deposits in Landsbanki Guernsey?
We are still waiting Mr Trott – When are you going to meet with the LGDAG?
We are still waiting Mr Trott – When is the Guernsey Government going to truly assist the depositors of Landsbanki Guernsey? Just as the UK, Netherlands, German governments etc.. assisted their depositors.
We are still waiting Mr Trott.
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