ISLANDERS are likely to lose the guarantee of 100 per cent protection for their savings when a Jersey depositor compensation scheme is introduced.
It has been announced that proposals for such a scheme could be introduced as early as the beginning of next year. However, the JEP has learned that a compensation package is likely to replace the existing guarantee which ensures that Islanders’ savings are safe.
As things currently stand, all savings held by Islanders in local bank accounts are 100 per cent protected, subject to States approval. However, this ‘political’ guarantee, which was announced by the Chief Minister, is to be a temporary measure until a depositor compensation scheme can be agreed.
No money deposited in Island banks by non-Islanders is protected at the moment. It is understood that the scheme to be proposed is unlikely to differentiate between local and non-local savers who have money in Island-based accounts.
It is also expected that Jersey will follow the lead of other jurisdictions and cap the amount which a depositor can claim if their bank collapses. At the moment the UK has capped its compensation scheme at £50,000 per account, or £100,000 if it is a joint account.
Article posted on 20th November, 2008 - 2.59pm
7 Article Comments
Or to be more accurate as things stand no savings whatsoever, resident or otherwise, are guaranteed in law. All you have is a statement from the Chief Mimister that the states would do something if necessary which is hardly reassuring. In fact (a) with c 10 billion of deposits by residents Jersey could not possibly make good on a guarantee of all those deposits; and (b) wiping out the rainy day fund and borrowing as much as possible to provide compensation isn’t going to be very popular so why the certainty that the states would vote it through.
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Perhaps this is just spin-doctoring again in order to encourage islanders to blew all their current savings this Christmas in Jersey which will in turn add to the enormous GST fund and give States Members a very happy pay rise!
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“World Class”
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Simple; if the ‘Jersey Finance Industry’ cannot guarantee savings, move your savings offshore.
Except in this case ‘offshore’ would mean the safe haven of the Euro zone.
Al has hit the nail on the head. Frank Walker, for all his charm, is modelling this seasons collection of ‘The Emperors’ New Cloths’.
Time for all of us to put on our thinking caps.
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Thanks a bunch…I’ve just fixed my life savings for a year on the basis of Walker’s political guarantee. I must be stupid to have believed him.
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No Phil, you weren’t stupid, you were misguided.
However, there is always next year.
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If we lose our savings due to incompetent bank fatcats then surely in this day and age that tantamounts to theft/fraud. Why can’t we sue for compensation….you can sue for almost anything else these days!! The banks usually survive by either being bought by a competitor or nationalised so the debt should be passed on and savings guaranteed!! Also, how can banks (amongst other companies) be reporting record profits of £billions year after year and now we find them going bankrupt!!! Are these “profits” unrealised paper figures…in which case it’s completely misleading. This needs to be looked at to report more accurate company valuations and hopefully contribute towards a more stable economy. This sounds too simple, but why couldn’t this work????
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