Crisis sparks co-operation call

Jersey and Guernsey are both major financial centres

A senior politician has called for further co-operation between Guernsey and Jersey in the light of the recent global financial turmoil.

The governments in both jurisdictions are looking at ways of boosting confidence in the banking system.

The islands are each investigating setting up a scheme to protect depositors' savings.

Jersey's Chief Minister, Senator Frank Walker, said he was keen to work closely with his Guernsey counterparts.

According to the City of London Corporation's Global Finance Centres Index (GFCI) which places financial centres around the world, Jersey is currently rated 14th - two places ahead of Guernsey at 16.

I have withdrawn £35,000 from an account in Guernsey as there's a complete absence of any guarantee, so I just can't risk it Tim Wright, musician

In Guernsey, Commerce and Employment Minister Carla McNulty has said protecting savers' investments was the government's top priority.

But Tim Wright, a musician who lives in Guernsey, said because there was no guarantee in place, he withdrew some of the savings he had invested after selling his home in Wales.

He chose a bank in Guernsey and one in the Isle of Man, but said the situation with the two accounts was "very different".

"The Isle of Man authority has been very reassuring, while help from Guernsey has been non-existent," he said

"It's almost as if they have their heads buried in the sand.

"I have withdrawn £35,000 from an account in Guernsey as there's a complete absence of any guarantee, so I just can't risk it.

"I feel so sorry about that but there is no security."

'Substantial recoveries'

In a statement on the States website, Guernsey's Chief Minister Lyndon Trott said while Guernsey had not been immune from the effects of the wider global turmoil, deposit levels in the island's banking system remained strong.

Referring to the Icelandic Landsbanki Guernsey being put into administration, Mr Trott said by the decision was supported by the Guernsey Financial Services Commission and was made before its parent company was nationalised by the Icelandic government.

"It was also made in order to protect depositors in the local bank which in hindsight was no doubt the correct decision," Mr Trott said.

"Depositors in Landsbanki Guernsey have not lost all their savings.

"I anticipate that there will be substantial recoveries from the bank, which will be passed on to customers."