ISLANDERS could lose all their savings if their bank collapsed amid global turmoil in the money markets.
Savers in the UK are protected by a bank deposits scheme which guarantees the first £35,000 of savings. But the guarantee, provided by the Financial Services Compensation Scheme, does not cover any bank in the Channel Islands – including branches of UK financial institutions.
If a UK bank went under, Islanders would face losing everything they deposited in the bank. Martyn Scriven, secretary of the Jersey Bankers Association, said that such a situation was unlikely, but he urged Islanders to be ‘sensible’ with where they deposited money.
He said: ‘Naturally, depositors will have some concerns because these are turbulent times. Jersey does not have a deposit compensation scheme, but this shouldn’t be too much of an issue. Instead of a deposit scheme, we have a system where we only accept the top 500 banks into the Island, which keeps out most of the lesser brethren. At the moment I don’t believe that there should be underlying anxiety. Nobody can give a cast-iron guarantee, but it may be wise for people to take precautions and ensure that their money is deposited in a reputable institution.’
Article posted on 18th September, 2008 - 3.00pm
21 Article Comments
Don’t panic Mr Mainwaring.
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Genius! So if we only allow the top 500 banks into Jersey, we’re safe are we? I suppose that should keep out the likes of HBOS, Lehman Bros and Northern Rock should it?
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well that would be a good explanation as to why there is so many banks here then… total write offs for all!! How convenient! I feel for the people who did not know this and have probably been misinformed time and time over again. GeET RID! Seems like the tide may turn again for a lot of greedy, well good. I wonder how much money will be moved out of Jerey now then!!
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I agree with merchant banker you cant fool all the people all the time the word is out and hopefully a lot of finance!!
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panic inciting headlines like this can be sometimes irresponsible, print some sensible advice for a change…..
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that is sensible advice !! Only stupid people panic when they havent done their homework!!Dont you think people have a right to know very important peices of information??? Do you honestly think a bank will tell you the potential risks when you save your money with them?? No i think is the answer
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JERSEY is in a ‘fantastic financial position’ that is ‘cause for celebration and congratulation’, said Chief Minister Frank
Erm… I dont think so…..Head & Sand Mr Walker
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The journalist who wrote this article really does not have much grasp of credit crisis by the sounds of it. Rather than attempt to incite wholesale panic, how about the JEP undertaking a constructive look at the banks who are in the island, and a review of those who might face trouble, and those who might not? HBOS clearly has exposure to the problems and is at risk – conversely Lloyds TSB – that veritable dinosaur of a bank – has not gotten itself over exposed to these markets, and you can presume, by its offering to take over HBOS, that Lloyds TSB is in a fairly safe position. How about some research and constructive reporting on the state of the other banks in Jersey instead of this dumb headline?
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If you want to keep any money hidden and safe, bury it in the cellar.
Surely no one will think of looking there !
Sounds familiar ?
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The moral of this story is very clear.
If you are a Jersey saver with less than £35,000 in the bank, take heed of Richard Heath; open a bank account in the UK.
Jersey is for super rich who can afford favoured taxation.
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Of course Jersey is safe… after all, you only allow the “top 500″ to come here.
Bear in mind that all the banks and insurance companies we see collapsing at the moment are just tiny family run operations, barely a blip on the financial radar… oh… hang on a second…!
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This explain a lot. I was behind an old lady at the cashpoint, who appeared to be withdrawing all her cash. She had a bag full!
Not such a crazy idea… If lloyds hadn’t bought HBOS she could have lost the lot!
Does that mean i may not have to pay off my overdraft if the bank goes under…. silver lining!
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So people are told their savings in Jersey are protected sufficiently by being in the “top 500″ banks? Who is kidding whom? Where do Merrill Lynch, Morgan Grenfell, HBOS, et al, fit in? Not forgetting that concern was expressed for most of the “established” banks. No bank was really “safe”. To tell people not to worry was to mouth platitudes. The future lies in giving the savers of Jersey a guarantee of protection for savings as in the UK. Or would this be imposing too great a cost on a very affluent island?
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“If you are a Jersey saver with less than £35,000 in the bank, take heed of Richard Heath; open a bank account in the UK.”
It would be great if it was as simple as that, but I’m not sure it is, there will undoubtedly be loopholes regarding Jersey residents.
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why has the States not asked these banks to pay into a fund over the past years specifically for the purpose of such an event?
PS we all know the answer.
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A warning of this kind should always be welcome as there are many banks that might be vulnerable due to actions of their Parent companies below is a warning given by a large group advising people on investment. Sooner or later the penny will drop with the World media and companies in the Channel Islands might come under pressure and the respective Governments would be faced with a problem where they would be powerless
Deposits in the UK are covered by the Financial Services Compensation Scheme to a maximum of £35,000. There has been some talk of that increasing to £50,000.
• Guernsey and Jersey offer no such compensation schemes although very often deposits held there will be with subsidiaries or branches of large UK companies which might themselves be regarded as safe. In the Isle of Man compensation is available up to 75% of the first £15,000 of any loss.
We all hope that no losses arise but it is better to be informed than otherwise. These are complex, problematic times and the purpose of this note is not to offer specific advice although we will be happy to do so if requested.
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The trouble here is savers will not transfer their savings over to the UK because in Jersey even though you are meant to declare your interest on savings to the taxman, who does? The banks don’t pass this info to the taxman. So think of all that money in accounts earning tax free interest not been declared.
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About 2 months ago when the Northern Rock Saga happened I remember Senator Ozouf saying that in Jersey there is no need for £35,000 of people’s savings to be protected as in the UK. Now that another States Member has raised his concerns – I see Senator Ozouf has suddenly jumped on the bandwagon by saying that he has already organised a review.
What Poppycock, does Senator Ozouf think we were all born yesterday.
Well done Deputy Le Claire for raising this concerning situation again.
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Can anyone give me the name of a reputable financial institution in Jersey in which to deposit savings?
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Can anyone give me the name of a reputable financial institution, in Jersey or otherwise? With all that’s coming out now about their smug little games, and with the FBI investigating Freddie Mac, Fanny Mae and AIG for alleged fraud, is there really such a thing as a reputable financial institution anymore. Considering our government is gambling all of our futures on these people, who are outside of Jersey, as Jeremy Paxman put it recently, ‘known as much for their cupidity as their stupidity’, shouldn’t we be asking serious questions of our Dear Leader? Or there’s the boat out in the morning I guess.
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You could always put it in Premium Bonds (max £20k) or National Savings certificates. These are open to CI residents.
Got to be safer than a bank in the immediate future, until we have a depositor’s protection scheme
Oh yeah, and the “Top 500 banks” thing is laughable. Stop treating us like fools.
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