NOW is not the time to change Jersey’s ‘top 500 banks only’ policy, according to senior regulators.

Colin Powell, chairman of the Jersey Financial Services Commission and adviser to the Chief Minister on international affairs, said that although that States had been criticised in the past for being over-cautious, in the current economic climate caution was now ‘the name of the game’. He said that the decision to grant Jersey banking licences only to the world’s top 500 banks had been taken in the 1970s, following the failure of two small institutions. However, a top 500 listing was by no means the only criteria for entry.

The States are currently under pressure to grant a deposit-taking licence to UK building society Kent Reliance, parent company of mortgage lender Jersey Home Loans.

Chief executive Mike Lazenby (pictured) says the States policy is flawed and that the banks ‘most in trouble’ are among the top 500. Earlier this month Mr Lazenby announced that Jersey Home Loans were suspending all their mortgage offers in the Island and that if the building society was not granted a licence to offer savings products in Jersey they would consider selling on the mortgage book to another lender.