NOW here’s an interesting question. Do you actually admire Jersey’s finance industry?

That’s not just appreciate or accept or tolerate, but do you actually admire and, perhaps, are you even proud of what the financial services sector is doing.

Even the most negative of observers (and aren’t there a lot of them in Jersey!) would have to admit that the Island would be in a pretty sorry state without the wealth that’s generated by the banks and other financial institutions.

True, there are some who seem to believe that if the finance sector was to disappear, then the Island could return to some kind of bucolic paradise, where the roads are uncongested, where there’s no pressure on the countryside and where we can all live quiet, unhurried, comfortable lives. Some chance!

There certainly wouldn’t be much room for dreamers in this paradise, which has never actually existed.
There would be few jobs and we wouldn’t be able to afford half decent public services so that our youngsters wouldn’t even get a good enough education to find a job off the Island.

No, most Islanders accept that we are lucky to have a major industry capable of providing well-paid, secure jobs and paying for a quality of public services that many of us are even reluctant to pay a 3 per cent GST for.

However, whether we actually admire the finance industry is another matter. It has to be said that financial services is not an easy business to be in and there are many risks.

In the past we’ve had Jersey-registered companies selling dog food for human consumption, Jersey-registered yachts involved in drugs smuggling and Jersey banks and companies used by unsavoury dictators to hide the money they have embezzled from their people. Whether anyone in Jersey was actually culpable in any of these crimes is almost beside the point. Jersey’s reputation suffered and there are many who think that all we are involved in is tax dodging, hiding illicit money and generally behaving like pirates.

But anyone who cares to look will see that this is very far from the truth and that perhaps praise, not criticism, should be levelled at the finance sector. Yes, there are very many risks involved with being an offshore finance centre, and occasionally something goes wrong. But you would have to go a very long way to find a centre with such a good track record as Jersey’s. There have been very few genuine scandals despite the very many pitfalls. This doesn’t just happen, and it’s not just a matter of luck.

An extraordinary amount of work has gone into ensuring that Jersey meets international standards while at the same time being welcoming to legitimate business. That’s not easy, but despite complaints from both sides of the argument, Jersey has so far largely managed to find the right balance between regulation and the freedom to do business.

That’s one reason why we should all have much more admiration for our finance sector. The other reason is that we are actually rather good at it.

Perhaps Jersey is used to punching above its weight, but it is nevertheless extraordinary that this tiny island is so well respected around the financial world. The tabloid press and the weird groups that come together to criticise finance centres like Jersey, can say what they like. The money still comes flooding in because Jersey is providing a service that is much in demand and much appreciated.

League tables are often very subjective and not very helpful in subjects like this. However, the relatively new Global Financial Centres Index, which is compiled for the City of London, is beginning to establish a reputation as the most accurate assessment of the relative standing of financial centres around the world.

A whole host of different measurements are made and these are combined with the personal assessments of those actually using the centres. They got off to rather a shaky start with Jersey, because the first index only assessed the position of the Channel Islands as a whole and not Jersey and Guernsey separately. As someone who keenly supports the islands working much more closely together, I would say that that merely reflects how many people outside the islands actually view them, but that’s beside the point.

So the latest index assesses Jersey and Guernsey separately and the results, I would suggest, are staggering. It’s obvious that London or New York would lead the index (London is actually slightly ahead) and then you have the major centres of Hong Kong, Singapore, Zurich, Frankfurt etc. Paris comes in at number 14, Toronto is 15, and guess who is in 16th place? Yes, tiny Jersey. It’s ahead of all other purely offshore centres and even one ahead of the leading offshore/onshore centre of Luxembourg. It means that Jersey is rated more highly than Amsterdam, Dubai, Bermuda, Madrid, Vienna and a host of major cities. Of course, not all of them want to be financial centres, although the vast majority would welcome the business with open arms.

The interesting thing is that Jersey is rated even more highly if just personal assessments by professionals are measured. The Island is then rated as the 12th best in the world. Indeed a sub index for the professional services industry ranks Jersey number seven after London, New York, Hong Kong, Frankfurt, Zurich and Singapore. Isn’t that something to be proud of?

I appreciate that this is bad news for all those critics who just love to knock the finance industry. Many of them view the sector almost as a necessary evil that we have to put up with for the sake of the money. Others don’t like to talk about it because they are not quite sure what all those banks and finance houses are really up to.

Well, what they are up to is providing high quality services that are much in demand and much appreciated on a global scale. So while counting all those pounds, euros and dollars, we can perhaps give the finance industry at least as much admiration as we give the Jersey cow.
Peter Body is the editor of Business Brief magazine