Page last updated at 10:41 GMT, Thursday, 8 January 2009

Regulator cleared over Landsbanki

Landsbanki logo
Landsbanki Guernsey went into administration in October

Guernsey's financial regulator has been cleared of any wrongdoing over the collapse of the Landsbanki Guernsey bank.

An independent report found no evidence of regulatory failure or that the Guernsey Financial Services Commission had acted unreasonably.

On Wednesday the Landsbanki Guernsey Depositor's Action Group (LGDAG) met the island's Chief Minister.

They were told they should receive some more of their money back this year.

An independent review carried out on behalf of Promontory Financial Group (UK) found the Guernsey Financial Services Commission maintained the highest standards of banking regulation and was not guilty of bad faith.

How big would that payment be and will we receive the remainder of our funds?
Neil Dickens, chairman LGDAG

Landsbanki went into administration last October.

More than 2,000 people had 117.3m saved in Landsbanki Guernsey when the bank was put into administration, 793 of them are based in Guernsey.

So far savers with the Guernsey subsidiary of the Icelandic bank Landsbanki HF have only been given 30% of their money back.

Neil Dickens, chairman of the LGDAG, said: "We've been told by the administrator that we should be receiving another payment this year, but how big would that payment be and will we receive the remainder of our funds?"

Depositor protection

At Wednesday's meeting Deputy Lyndon Trott told depositors the administrator should be allowed to continue his work and that pressure for early repayment of the rest of the funds was "unlikely to result in the best possible financial outcome for depositors."

He said the Guernsey government had held meetings with the UK and Icelandic governments about compensation.

But he said there is "insufficient appetite" in Guernsey for a phantom depositor compensation scheme to provide early payment to Landsbanki savers from the States' coffers.

A depositor protection scheme was introduced in Guernsey in November last year, but Landsbanki savers are not covered by it.

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