States of Guernsey

Wednesday 4 March 2009

The Chief Minister rejects criticism that he has 'reneged' on an agreement to meet the depositors.

The Policy Council issued a statement: 'The Chief Minister has committed to hold a meeting with depositors and the public and has never backtracked from that. Both have an an interest in an important issue and deserve to be heard.'

Thursday 26 February 2009

The Chief Minister has written to all States Members advising them of his intention to hold a public meeting with Landsbanki depositors and interested members of the public.

He asked any Members keen on the use of taxpayers' money to support the depositors to make that known before the meeting takes place.

Wednesday 28 January 2009

Chief Minister Lyndon Trott and Treasury and Resources Minister Charles Parkinson answered questions in respect of Landsbanki (Guernsey) at today's States meeting.

Both politicians resisted calls for the use of significant sums of taxpayers' money to offer assistance to Landsbanki depositors and indicated that there was little support for such an approach from States Members.

Deputy Parkinson said that his Department had investigated opportunities to secure early payouts to depositors, but it was considered that none would be of significant benefit to depositors, compared with the payout expected from the Administrators.

Wednesday 7 January 2009

Senior representatives of the States of Guernsey, including Chief Minister Lyndon Trott and Treasury and Resources Minister Charles Parkinson, met representatives of the Landsbanki Guernsey Depositors Action Group for a second time.

Deputy Trott said that recent events had confirmed the need to appreciate that the primary responsibility is with the Administrators and their work must be allowed to take their course. 

'It is clear that acquiescence to pressure for early repayment is unlikely to result in the best possible financial outcome for depositors,' said Deputy Trott. 

The questions and answers from the meeting are available for download on this page. 

Monday 24 November 2008

Chief Minister Lyndon Trott, Treasury and Resources Minister Charles Parkinson and Chief Executive of the States Mike Brown met representatives from the Landsbanki Guernsey Depositors Action Group at a meeting at Sir Charles Frossard House today.

Deputy Trott described the meeting as one of co-operation and understanding. Questions raised by the group were answered as fully as possible. The text of the majority of the questions is available for download at the right of this page.

The two sides have agreed to meet again when significant developments occur. It is hoped that this may be before the end of the year.

Monday 10 November 2008

Chief Minister Lyndon Trott has written to the Landsbanki Guernsey Depositors Action Group and accepted a request for a meeting with them. The meeting is likely to take place in the UK before the end of November.

The letter is available for download in the box to the right of the screen.

Friday 31 October 2008

The Guernsey Financial Services Commission has announced that Promontory Financial Group (UK) Ltd will conduct the inquiry into the manner in which the GFSC handled recent events relating to Northern Rock (Guernsey) Ltd and Landsbanki Guernsey Ltd.

Terms of reference have been agreed. The inquiry will begin early in November and should be completed by mid-December.

Wednesday 29 October 2008

Chief Minister Lyndon Trott has updated the States of Guernsey on a meeting he had on Tuesday (28 October) with Iceland's Finance Minister Arni Mathiesen in Finland.

Text of the speech is available for download, see the box (right).

Friday 24 October 2008

A number of people have asked whether the planned Depositors Compensation Scheme will cover Landsbanki Guernsey depositors and if a change in the circumstances of the bank will make a difference.

Treasury and Resources Minister Deputy Charles Parkinson responds:

'From the outset we have made clear that the Depositors Compensation Scheme which we are working on establishing in Guernsey next month will not be retrospective. This means that Landsbanki Guernsey depositors will not be able to apply for compensation when the scheme is up and running. It is for the administrators to decide on the future of the bank but, as I say, whatever action they take Landsbanki Guernsey depositors will remain outside of the scope of the proposed scheme.

'The Government of Guernsey is working hard to ensure depositors get the best possible outcome. In addition to the 30 pence in the pound initial payment to those depositors announced by the administrators last week, there is a good prospect that they would receive still more.

'As soon as the administrators are able to make further announcements, they will. They and we fully understand the need for depositors to be kept up to speed on developments.'

Friday 24 October 2008

Chief Minister Lyndon Trott is quoted in today's editions of the Guernsey Press and Star and the Financial Times. He issued this statement to the newspapers in relation to the Isle of Man's Government to spend £150m. of public money to support its depositors compensation scheme.

‘This is an interesting development from the Isle of Man and I look forward to seeing the resolutions of the Isle of Man legislature and the detail behind it.

‘Funding from the state for a Depositor Compensation Scheme is not something we are contemplating in Guernsey. We have been channelling our energies into an appropriate bank-funded scheme.

‘While we continue to do all we can to ensure that Landsbanki Guernsey depositors receive all their money back, our position has been clear from the outset that we would not propose the use of taxpayers’ money to support any pay out.

‘We need to spend taxpayers’ money on essential infrastructure developments for the people of Guernsey – new schools and healthcare – and that will continue to be the priority of the States.’

Monday 20 October 2008

Transcript of an interview with Treasury and Resources Minister Charles Parkinson on BBC Radio 4's Money Box programme, Saturday 18 October 2008

Q: Presumably people will never get all their money back. Is that the bottom line?

CP: No, I don’t think that can be concluded at all. There are assets which exceed the bank’s liabilities, that’s true even if you disregard the loan up to Landsbanki in Iceland and assume that’s completely irrecoverable. The remaining assets of the bank, at book value, more than cover all the deposits, but absolutely crucial issue here is what the recovery rate is achieved on those assets.

Q: Do you not think you might be raising people’s hopes unrealistically by saying there is even the chance they could get all their money back?

CP: I wouldn’t say that if I didn’t think it was realistic, but I’m very far from saying it’s a certainty.

Friday 17 October 2008

Statement from the States of Guernsey Policy Council

THE States of Guernsey is doing all it can to assist depositors with Landsbanki Guernsey to achieve the best possible outcome for a return of their savings.

‘We sympathise with the concerns and the worry of depositors,’ said Treasury and Resources Minister Charles Parkinson. ‘We recognise the uncertainty they face and the pressure they must be under.

‘That is why we have been doing all we can to assist, both locally and internationally, including working at a high level with the UK Government to ensure that the interests of Landsbanki depositors are represented in meetings with the Icelandic authorities.’

It was confirmed earlier this week that HM Treasury had agreed to support the States of Guernsey in representations with the Icelandic Government over Landsbanki Guernsey.

The Guernsey Financial Services Commission has also written to the controllers of Landsbanki Guernsey’s parent bank – the Icelandic regulators – pressing for the parent bank to honour its commitments to meet the Guernsey bank’s liabilities, including depositor liabilities.

The GFSC acted promptly in recognising the difficulties being experienced by Landsbanki Guernsey. The early decision to place the bank into administration and freezing its assets has undoubtedly secured a better position for depositors.

While depositors in Landsbanki Guernsey are not covered by any Depositor Protection Scheme, the Administrator has made clear that prospects for further repayments, beyond the 30p in the pound interim payment already announced, are good.

Further repayment is dependent on a recovery of certain illiquid assets, and the States will do what it can to assist the process of sale.

Progress towards the introduction of a bank-funded Depositor Protection Scheme has been rapid. Deputy Parkinson aims to get a scheme before the States for approval at the end of November. But there are no plans for the scheme to be introduced retrospectively to cover Landsbanki depositors.

The Landsbanki Guernsey issue has put Guernsey’s financial services sector in the public spotlight and led to criticism.

However Deputy Parkinson said that in the long term, it would be recognised that the regulatory system in Guernsey did a good job in protecting the interests of depositors.

‘Hopefully the depositors in Landsbanki Guernsey will get back most or all of their money,’ he added.

The problems of Landsbanki Guernsey stemmed from the problems of its parent company in Iceland, and sister company Heritable Bank in the UK.

‘They stem from problems that have arisen onshore,’ Deputy Parkinson said. ‘We import instability from onshore, we don’t export it to them.’

Guernsey has consistently achieved high-ranking approval from international regulatory authorities and was recently recognised as improving in the latest Global Financial Centres Index and named ‘International Finance Centre of the Year’ at the STEP Private Client Awards 2008/9.

The International Monetary Fund has conducted an in-depth evaluation of Guernsey against modern international standards and commended the island for meeting these standards across all the assessed areas in banking, insurance, securities, anti-money laundering and combating the financing of terrorism, and for meeting best practices for trust and company service providers.

Statement ends

Thursday 16 October 2008

The States of Guernsey Policy Council has welcomed today's news from the administrators of Landsbanki Guernsey that an initial 30% of deposits will be made available to depositors.

This important first step is a reflection of the prompt action taken to protect depositors of Landsbanki Guernsey by placing it into administration in advance of the major crisis in the Icelandic banking system. This means that its assets remain potentially recoverable.

The figures released by the Administrator suggest that the book value of the assets of Landsbanki Guernsey exceed current liabilities. There is therefore the potential for depositors to receive more.

The States of Guernsey will continue to work with the administrators and the Guernsey Financial Services Commission in the interests of depositors.

Statement ends

15 October 2008

Deputy Charles Parkinson, Treasury and Resources Minister, States of Guernsey, has told BBC Guernsey that the States are trying to enforce the Landsbanki Guernsey parent company guarantee on behalf of depositors.

Deputy Parkinson added that there was no possibility that the introduction of a Depositor Protection Scheme for the island could be introduced before the end of November, the target date announced next week.

'I did look at a compressed programme trying to bring a scheme to the States in mid-November but it would have left me only one week to hammer out the details of the scheme with the banking industry. That simply isn't a practical timetable. We are doing this as fast as it can be done,' he said.

Interview with Treasury and Resources Minister Deputy Charles Parkinson on BBC Five Live's Wake Up To Money programme, Tuesday 14 October

Q: Will savers caught out by Landsbanki Guernsey get any benefit or is it too late for them?

CP: There is no Depositor Protection Scheme in Guernsey but of course you don’t need one where a bank has assets which cover its liabilities, and Landsbanki Guernsey does have assets. It’s now in administration and the big question is, are there sufficient assets to bail out the depositors?

Q: How far back in the queue are the depositors with all the other creditors?

CP: The bank’s in administration, not liquidation. If it goes into liquidation I think all the creditors rank pari passu [they all have an equal stake], but of course the depositors are by far the largest creditors of the bank.

Q: What can the administrator salvage or sell to get people their money back?

CP: The bank had a relatively diversified balance sheet. Not all the assets are terribly liquid - a problem we’re trying to work to address - but there is a common misunderstanding in Guernsey that people think all the assets were lent up to the parent company in Iceland, which of course is insolvent, but that’s very far from the case.

Q: Do you think this will have repercussions for Guernsey? Finance is very important to Guernsey, if it affects your reputation funds might not come in?

CP: It’s very unfortunate. On the other hand the depositor base in the island seems to be holding up rather well and some of the banks here have actually benefitted from the so-called flight to quality. I don’t think it’s done very serious damage to the reputation of Guernsey but we desperately want to get this sorted out and secure the best possible outcome for the depositors of Landsbanki.