FINANCE industry specialists are predicting ‘six months of hell’ as the UK government probes the Island’s crisis management, international co-operation, tax arrangements and transparency.

The review announced by UK Chancellor Alistair Darling in yesterday’s pre-budget speech is the latest in a series of reviews that have sapped the Island’s resources both in time and effort. Jersey’s financial regulation is currently undergoing an in-depth examination by the International Monetary Fund, and the UK Treasury Select Committee of MPs in September began an independent review of the three Crown Dependencies, prompted by recent international banking failures.

The last time the UK government commissioned a review of this nature was in 1998. The Edwards report, as it became known, concluded that Jersey was in the top division of offshore centres and had a clear commitment to defeating money laundering. Officially Jersey’s finance industry is heralding this latest review as an ‘opportunity’. Geoff Cook, chief executive at promoters Jersey Finance, said: ‘Our standards of compliance and governance are world class and we have the facts to prove this.’

John Riva, head of tax at KPMG, said the worst that might happen this time around would be if the UK government were to focus on Jersey’s ability to bail out the banking sector, given the size of the finance sector in relation to the rest of the economy. ‘Basically this is nonsense, because we do not have Channel Islands banks – they are all subsidiaries of major banking institutions based elsewhere. It is not Jersey that has to bail them out, but their parent country. My personal feeling is that we will have six months of sheer hell. It was the same with the Edwards report – it really shook us up, accelerated legislation we had until then only been thinking about.’

• Picture: John Riva of KPMG