UK up to £85K but Guernsey deposit cover stays at £50K
Friday 24th December 2010, 2:29PM GMT.
Commerce and Employment minister Deputy Carla McNulty Bauer. (Picture by Adrian Miller, 0982405)
COMMERCE AND EMPLOYMENT has no plans to amend Guernsey’s depositor compensation scheme, despite the UK upping the maximum amount claimable on its version to £85,000.
The Financial Services Authority has recently confirmed that the level of savings covered by the UK scheme is set to go up from £50,000 from 31 December.
The new limit, equivalent to 100,000 euros, is being introduced to bring the UK into line with a new European Economic Area compensation level. Other changes mean the majority of claims, should a bank go bust, will be paid within seven days and the rest within 20.
Here, however, C and E said the maximum amount claimable would remain at £50,000.
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I have two accounts with the Coop bank. Current is in Guernsey and the Savings is a UK sort-code. I didn’t ask for the latter it just happened when I set it up and had to sign a form stating I was a Guernsey resident. That makes my savings covered by the UK DCS. A happy accident, thanks Coop.
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I just wonder how much more can go wrong at Commerce & Employment.
The Chief Minister is blaming them in today’s Press article for the inaccurate information he gave the States at the Depositor Compensation Scheme debate. Quote:
“The compensation scheme was a matter for Commerce & Employment and it was the departments advisors who would have checked the accuracy of the prepared response given in the States.”
The correct information was on the European Commission site in July 2010, stating that the upgrading of the DCS in Europe to 100,000Euros (£85,000) would commence on 31st dec 2010.
The Chief Minister in the states said 3 to 7 years. How can a department get it so wrong.
The landsbanki Depositors are still waiting to find out who told him they would get back greater than 100% of their savings. But he’s gone very quiet on that.
Guernsey’s Depositor Compensation Scheme is now a shambles and i believe we haven’t heard the end of this saga.
Guernsey is now at a total disadvantage to the UK or Europe. Would you deposit money where you have to wait three months for any returned and then you may or may not get up to £50,000, against £85,000 returned within seven days. No contest.
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As a Landsbanki Guernsey depositor, I have just received my latest Deloitte’s statement which states that out of a total of 116,995,446 pounds that was in Landsbanki Guernsey, 49,937 pounds had been deducted for tax.
In addition, the States of Guernsey are waiting to receive a further 157,666
pounds for Income tax as Non-preferential creditors.
It makes me feel so happy when I hear Lyndon Trott talking about not ‘using Taxpayers’ money to help the Landsbanki depositors when we are quite obviously ‘Taxpayers’ of Guernsey.
Have a merry christmas Mr Trott and I hope that when you receive your remaining installments of ‘Taxpayers money’ from my lost savings that you use them very wisely! (Perhaps pay for someone to be in charge of a Banking Regulatory Authority that can actually regulate a bank and even check that banks have signed their ‘Guernsey Guarantees’ – for whatever they are worth!)
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I think the Chief Minister should take it on the chin, rather than blame his misinformed statements on poor Carla McNulty Bauer. Latter must be feeling rather jetlagged after her trips to the Far East so give her a break, Lyndon. You made the statements in the Assembly, not Carla. Take responsibility and stop trying to blame everyone but yourself!
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How can the Bailiwick public have any confidence in politicians and their civil servants when they clearly get important information like this for the general public of the Bailiwick so very wrong?
The vast majority of Bailiwick residents are likely to have a retail bank account and this will affect them all. In their interest it is important that there is transparency and responsibility to our retail banking system, as recommended by the European Union.
On behalf of retail bank depositors Deputy David de Lisle had taken this issue to the States and there is clear and unequivocal documented evidence of the replies he got from the Chief Minister Lyndon Trott: “…that process is likely to take some years, with the process usually taking between three and seven years depending on the nature of the particular proposal.”
To further compound the issue we then had the Chief Minister going on Radio Guernsey Live in October and stating:
“Now the Depositors Compensation Scheme: there has been some confusion I think about the changes that are taking place in Europe to raise the figure to 100,000 euros and I gave some very comprehensive answers to Deputy de Lisle in the States which talked about the EU process, which means to all intent and purposes there is a 10 year transitional period in place before these measures have to come in line with EU law, and in any event Guernsey will now ensure that it maintains a Depositor Compensation Scheme that is in line with international best practice, and that is something I will continue to support”.
The department responsible for the Guernsey Depositor Compensation, Commerce & Employment’s top civil servant, Jarrod Cowley – Grimmond, Director of Financial Sector Development, also makes the prediction that ‘it could take anywhere between two and five years before the schemes in Europe see changes, although EU officials are talking about progress and changes happening by the end of 2013’.
What is so annoying in this whole affair is the fact that the correct information was issued by the EU in July of this year, available on the internet for the whole world to see.
“the upgrade to € 100 000 by the end of this year is now confirmed”
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/918&format=HTML&aged=0&language=EN&guiLanguage=en
The Bailiwick retail bank depositors deserve far better than this; to add insult to injury the GFSC, Guernsey Finance and the Association of Guernsey Banks have failed to inform the public through their website of this important development, a total lack of transparency on their part.
What is the point of having an expensive office in Brussels if you have no intention of, at the very least, reading the guidelines and standards being produced there?
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Guernsey’s Government and its financial institutions seem to be repeatedly failing to meet an adequate level of duty of financial care for their citizens. Shame!
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Ho ho ho! Well spotted and well remembered Eric.
A quick search in the GP finds Cowley-Grimmond’s “prediction” that the EU 100K euro cover would take “two and five years” to come about at:
http://www.thisisguernsey.com/2010/07/27/island-will-not-adopt-euro-payout-draft-law/
A “prediction” made two weeks AFTER the EU had confirmed it would happen at the end of this year! LOL! Talk about asleep on the job!
And as for Trott saying it’d take 3-7 and even 10 years, several months later, what a joke…
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The Chief Minister makes totally false statements, then blames everybody when he is found out. A bit of humanity as well as duty of care would’t come amiss. Seasons Greetings to you, and learn the spirit of fairness, Ebeneezer!
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NOt only does the Chief Minister obviously have no idea of what is happening in his departments or in the UK he and the other worthies who kneejerked the DCS into being have no idea of its functioning. I have asked repeatedly of the GFSC and the management committee in ‘charge’ of the DFS how exactly it will work in the case of another bank failure and have been told ‘ to get a lawyer’ needless to say, based on this sound advice I merely got another bank – outside of Guernsey!
Where exacly is the guarantee for the DFS £100M – is is physically in a bank account, I read so much of the parlous state of the Guernsey economy, capital flight will now only increase as the DCS is disadvantageous to savers, that I wonder with this continued capital flight and the other mis managed drains on the public coffers how the DCS will actually be paid out. Or is it another of the Chief Ministers fingers crossed hope you don’t find out ideas?
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After my elderly mother lost the sale money from her house due to the Landsbanki fiasco, I have no respect or trust in the Guernsey banking setup. I have therefore withdrawn my Guernsey savings, along with my mother’s partial return of her savings, and invested the entire in a property to rent out.
You dont get any interest on savings anymore, and probably wont for the forseeable future, and Guernsey’s attitude to losing savings on the island makes me advise anyone to get your money out of the Guernsey banks.
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Just what is our Government of Guernsey trying to do to our finance industry?
My London friends and family are asking me what is going on. Well they may ask. I am ashamed that we have become such a third-rate place. We used to be held in really high esteem. Even I am no longer entrusting my savings to my own ‘country’.
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Now would be a good time for UK banks to advertise their services in the local Press as long as there is no palaver about having to deduct then retrieve UK tax
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Jules – that is a very wise investment, but not due to any risk in Guernsey banks, but simply because you will make more money.
Ex Londoner – the finance industry is not about retail banking. The only people that should be concerned about retail banking in Guernsey are Guernsey residents. The finance industry provides a raft of other services to the onshore world, is very well regarded amongst those that use it and is growing.
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TL
If you live in Guernsey and rely on deposits then why shouldn’t people be concerned when they see others with a better safety net?
It’s pithy to snipe at local deposit holders.
As for “growing”, I think it’s more “evolving”.
If there was real growth there would be more employment. There isn’t. The problem with people in the finance industry is that they measure success based on artificially derived conclusions.
I would count a 1% workforce loss as a sign of contraction.
If there are more transactions occurring through Guernsey then what are they? What is their purpose?
The last few years have shed an awful lot of light on the raison d’etre of places like Guernsey. The scutiny can only intensify. If we have rubbish policies that do not look out for the ‘little man’, then policies that help out the big cheeses will smack of regulatory capture.
Doh! Like, it’s not already!
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Ray
there is no palaver in having interest paid gross to ypur account from a UK account, you simply fill in an R105 declaration form for UK Revenue & Customs declaring you are a CI resident and that’s all there is to it.
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Arnald – you really can generate an argument out of nothing. My comment was in relation to Ex Londoner, who was talking about people in the UK. Your statement about Guernsey residents is in fact the same as mine.
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A lot of UK banks will not accept deposits from Guernsey residents,so Guernsey people are forced to bank offshore.
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Gary
Thanks for that.There appears to be a hole forming in the banking system for locals.I will look into it
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So TL, do you think there has been a large measure of regulatory takeover here? It’s the only explanation to why Guernsey bureaucracy has allowed its residents to be singled out for loss.
Banana republic?
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Deposit protection? Who pays then?
Let’s embrace the spirit of true capitalism and let failing banks fail – let people do their own due diligence and remove their deposits from their banks if they don’t like what they find.
Stop socialising the losses and privatising the profits – that’s not good for ordinary people or the economy.
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The Guernsey authorities do not care about retail depositors. This has been demonstrated by the way the Guernsey authorities changed there mind over pre-funding of the depositors compensation scheme (DCS) under pressure from the financial sector. And the DCS only came into play after the collapse of Landsbanki after years of resistance by the banking sector. So Guernsey retail bank depositors can forget fair treatment. It’s the financial sector that call’s the shots in Guernsey.
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John Ervinn:
Does anybody in the Bailiwick care about retail bank depositors?
Let’s look at the available evidence:
* Despite the fact that the EU announced the £85,000 increase in July of this year, there is no mention of this to be found on the Guernsey Financial Services Commission website.
* Try the Guernsey Finance/Association of Banks website – yet again no mention.
* The Guernsey Banking Deposit Compensation Scheme website:
Their latest leaflet is dated August 2010, no mention of the increase and the leaflet still telling us that the DCS will be paid for by the Licensed Banks through annual charges and special charges in the event of a bank failure, which as we all know now was changed by Commerce & Employment in November this year, after pressure from the Banks, to a post-funded scheme.
Are Commerce & Employment ensuring that the DCS Board are sending out updated information to banks to pass on to customers?
Are any politicians, apart from a relative few, making noises about the uncertainty and apprehension of retail depositors?
Sadly, the only group monitoring the situation is the Landsbanki Guernsey DAG, who, following their own misfortune do not want to see any other Bailiwick retail depositors go through what they have had to endure in the last 27 months.
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