IT became clear last night that the £700 billion government bail-out for the chaotic US financial system that Wall Street and stock markets throughout the world had been expecting was not going to happen as Congress rejected the plan.

Shares have since plummeted globally and finance professionals will be asking themselves how many more catastrophes can be piled on top of the sub-prime mortgage crisis which is at the root of the current storm.

In spite of its formidable reputation and the many billions that it guards and administers, Jersey is but a small cog in the mighty machine of international finance. It would, therefore, be naïve to believe that Islanders will remain unaffected by what is happening in the USA, Britain, the rest of Europe and in the East.

At the very least, those with assets related to the equity markets will see the value of their savings fall. This, moreover, will apply not only to those who deal directly in stocks and shares, but also to anyone with a pension or an insurance-based investment. There is also the possibility of job losses as organisation rationalise and cut costs.

Meanwhile, the uncertainty and outright caution spurred by the present débâcle will feed into general economic conditions. If, for example, it is now difficult to borrow money, it is likely to become even more difficult as the shock waves from last night’s news and the events that went before continue to shatter confidence at all levels.

But are there crumbs of comfort to be discovered somewhere in this international mess? As far as Jersey is concerned, there are.

Reassurance is being offered by experts ranging from international affairs adviser and Jersey Financial Services chairman Colin Powell to senior industry figures and politicians. All stress a number of fundamental truths about the Island industry which provide grounds for optimism.

It is, for instance, true that the decision to allow only the world’s top 500 banks to set up shop here will offer protection. It is also true that our banks are deposit takers and, to use Mr Powell’s expression, this will make us ‘very popular’. In addition, expertise in specialist areas such as trust work and other forms of private wealth management mean that we have strings to our bow that are not available to all financial centres.

These are certainly troubling and testing times, but the conclusion must be that we are better placed to pass through them than many other more vulnerable jurisdictions – though individual Islanders will feel more comfortable if proposed investor protection measures now under discussion can be introduced in short order.