Guernsey sets up deposit compensation scheme
Thursday 27th November 2008, 2:55PM GMT.
DEPOSITS in Guernsey banks of up to £50,000 will be covered from today by a new compensation scheme that was sealed yesterday.
However, it will not be retrospective and will not benefit worried investors with frozen accounts in Landsbanki, the Icelandic-owned Guernsey bank in administration.
The scheme, which has been agreed between Guernsey’s States and any bank based in the island, takes immediate effect and will compensate retail customers up to £50,000 each if a locally based bank fails. The total claim on the scheme is capped at £100 million and the first £20 million will be covered by an insurance fund into which the banks will pay an annual levy.
But the fact that Guernsey has got there first is of little concern to Jersey’s Chief Minister Frank Walker. He was in London today for a meeting with UK Treasury officials about the setting up of a review of the finance industries of the Crown Dependencies.
Read the full story in the Jersey Evening Post. Click here for subscription details. Individual editions are also available online.
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Who are the Guernsey authorities trying to kid ?
A £100m compensation pot hardly scratches the surface- it equates to 2000 depositors being covered up to the maximum amount of £50,000 each.
Were more than one bank to go under simultaneously then the fund would be hopelessly out of its depth- bringing the island into further disrepute !
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The Isle of Man beat the Channel Islands in terms of Depositor protection, and continues to do so.
Unlike the Channel Islands, the Isle of Man has had a scheme in place for some time.
Formerly 75% of up to £20K was protected but immediately following the crash of Kaupthing on IOM this was increased by the IOM Government, AND retrospectively, to cover up to £50K per individual deposit per deposit taker.
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I wouldnt boast about the fact that Guernsey introduced a compensation scheme before Jersey as you might then have to advertise the fact that they also managed to oversee a bank failure before Jersey!!
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