Page last updated at 14:06 GMT, Thursday, 29 October 2009

Islands advised in finance review

Bank notes
The independent review was welcomed by both Jersey and Guernsey

An independent review into financial practices in the Channel Islands has urged financial ombudsman and depositor protection schemes be examined.

The review, for the UK Treasury, scrutinised financial supervision, transparency and taxation in Crown Dependencies and Overseas Territories.

Michael Foot, a former official at the UK Treasury, praised high regulation standards in Guernsey and Jersey.

He added that crown dependencies needed to increase security for depositors.

The review began in Autumn 2008.

'Dispelling myths'

The report recommends that jurisdictions ensure depositor protection schemes are clear to understand and states that Guernsey and Jersey, unlike the Isle of Man, both lack an Ombudsman scheme and should consider one.

The report acknowledged the work of the Channel Islands to meet the OECD standards for tax transparency and in negotiating high numbers of tax information exchange agreements with other jurisdictions.

The recommendation that the UK leads a drive to ensure all EU member states and third countries automatically share tax information was welcomed by Senator Terry Le Sueur, Jersey's chief minister.

Senator Philip Ozouf, Jersey's deputy chief minister and treasury minister, said: "We agree that no jurisdiction can afford to be complacent and that as tax regimes evolve in each jurisdiction these should be aligned with international 'best practice' taxation models in the global landscape."

Deputy Lyndon Trott, Guernsey's chief minister, said Guernsey had a good message to tell, although he also admitted that the island could not be complacent.

Deputy Trott said it did refer to further work to be undertaken including preparing for further economic downfalls and whether an ombudsman scheme would be justified, but this was all work that the States had already begun.

He added he hopes the report will help dispel some of the myths surrounding the financial services sector.

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