Failed savers claim 'negligence'

Landsbanki Guernsey went into administration in October

Guernsey's financial regulator is facing fresh accusations of negligence from savers who lost money when the Icelandic bank Landsbanki collapsed.

Landsbanki Guernsey Depositors Action Group (LGDAG) says it has new evidence of regulatory failure on the part of Guernsey Financial Services Commission.

However, the commission's actions were investigated in a Treasury report and cleared of any negligence or oversight.

It has denied the new claims and says the group offers no evidence.

Obligations 'met'

Nick van Leuven, the commission's director general, said the Treasury report concluded that Guernsey Financial Services Commission had measured up to good practice and had met its obligations.

More than 2,000 people living in both Guernsey and Jersey had about £20m deposited in Landsbanki Guernsey when it collapsed last October.

The LDAG, together with members of the Landsbanki Guernsey Expat Depositors Group, have been actively campaigning for compensation though the States for their lost savings.

From evaluation of that data it indicates at the very least there was an oversight or potentially there was some degree of negligence on the part of the Guernsey Financial Services Commission Matthew Doorman, LGDAG

They have so far received 30p compensation from administrators for each pound lost.

However, they have been told they could expect to get back between 68p and 89p for every pound invested in the bank but this additional return is dependent on further recoveries being made on loans.

Matthew Doorman, of Landsbanki Guernsey Depositors Action Group (LGDAG), said: "We've now had time to go through the evidence sessions of the treasury select committee hearings in the UK and also some further information coming out through the heritable administrators.

"From evaluation of that data it indicates at the very least there was an oversight or potentially there was some degree of negligence on the part of the Guernsey Financial Services Commission."

Guernsey has introduced a compensation scheme but Landsbanki depositors are not covered because the bank went into administration prior to its creation.