Scrutiny chairman faces confidence vote
Thursday 16th July 2009, 2:59PM BST.
Economic Scrutiny chairman Deputy Mike Higgins
PLANS for a deposit protection scheme have been shelved until after the summer recess for a Scrutiny review.
Despite heavy opposition from around the States Chamber, Economic Scrutiny chairman Mike Higgins used his statutory power to ‘call in’ the legislation and suspend the debate.
But the decision to do so might cost him his job – within two hours of his manoeuvre, Deputy Angela Jeune prepared a ‘no confidence’ motion in the panel.
That proposition was distributed to the media, but because it omitted references to financial implications, it was not technically lodged.
Members spent nearly four hours debating the principles of the scheme, starting on Tuesday afternoon and continuing until around 2.30 pm yesterday.
The proposition by Economic Development Minister Alan Maclean would guarantee compensation for the first £50,000 of bank deposits held in the Island in the event of a bank failure.
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Does that include all investors or just people who live in Jersey ?
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Good on you Mike – the Council of Ministers cannot be allowed to dictate to Scrutiny. The COM have tried to bulldoze this through without a proper review.
In its current proposed format this proposed law is merely a sop to public opinion, it will have no effect either way to the finance industry (£50K being peanuts to the majority of outside investors in Jersey)and if Jersey had to fork this out it would have catastrophic implications to the Island.
Why should the taxpayer have to pay for the mistakes of financial institutions? The obvious sensible solution is for this to be funded by the banks themselves as Mike has constantly stated.
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Mike Higgins is a good man, thinks things through thoroughly,we need more like him..well done for sticking to your guns Mike.
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I had to laugh yesterday, Mr.Ozouf claiming that he was in a minority government! Then we had Terry Le Main claiming a multiple millionaire investor was not using Jersey and all because of a lack of bank deposit protection! What use £50,000 would be if this person lost up to £200M I don’t know.
Well done Mike Higgins for standing up to Ozouf and the CoM. Jersey needs to get this right not be panicked into bringing something in that isn’t worth the paper it’s written on. Scrutiny is there to scrutinize not be circumvented when the CoM is on a sticky wicket as far as I am concerned.
The silly thing is that 7 years ago depositor protection could have been brought in. Why wait until the banks are on a knife edge before thinking of Bank deposit protection? Another farce as far as I am concerned.
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I’d have more confidence in Mike Higgins’ views on the depositor scheme than any other States member. Remember he used to work for the financial services commission so will know the scams from the inside.
I’ve listened to him in the States and he really seems to have a good understanding of economics and the financial problems facing this island. In fact in a normal country he would be the finance or economics minister as such positions are usually bestowed according to merit rather than patronage.
Angela Jeune on the other hand has no understanding of complex problems.
God help us if her views prevail, but being Jersey they probably will as mediocrity seems to be revered here.
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My understanding was that during the “credit crisis” the States had given an unlimited guarantee that they would underwrite ALL losses to international investors should a Jersey Bank go down. Given that Jersey, unlike the UK and US actually enforce financial regulation the most likely cause of such a crash would be the head office dragging the Jersey operation under. If that were the case and this guarantee called upon Jersey would be bankrupted.
Whilst Deputy Higgins shrugs this off as an “establishment” problem us peasants must understand that this is our life savings, our pensions, our schools and hospital we are talking about. The proposal was to replace this unlimited guarantee with a potential value of many Billions of Pounds with a proper depositor protection scheme that would include locals [peasant] and limited as in the UK to £50k.
Whilst Deputy Higgins has scored one over the Establishment he has ignored the potential cost to the Island. Should something happen before he reports back and he has already had the documents for 6 weeks and still on page on, we stand to loose everything.
Please Deputy Higgins in this instance put the people of Jersey ahead of your petty vendetta against the Government. By your selfish actions if something does go wrong the consequences for the Island and its people are far beyond contemplation.
If you can’t put Jersey first then stand down.
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Stick to your guns Mike – you command a lot of respect and credibility from the electorate, and certainly know the ins and outs of such a scheme.
Why now the sudden rush to get this through. Act in haste, repent at leisure CoM. Mike Higgins is the man to do the job properly, and for once please can we have a proper job done.
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6 Sanity,what a misnomer, you are so far off the mark here it beggars belief,it’s about getting it right, nothing else.
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Why the sudden rush to get this through?
Because there is the Foot report about to be published that will criticise Jersey on the International stage for not having a DCS.
Because Guernsey brought in a very good scheme in a matter of weeks.
Because all the time banks are looking at their structures. And if you are a bank with branches in Jersey and Guernsey and you are looking to reduce costs, you know what the cost of the Guernsey scheme is. By delaying the Jersey scheme, you do not know how much the Jersey scheme will cost. So you create uncertainty which may well lead to job losses.
And for those of you who think Mike Higgins is an economics guru, remember he was at the Financial Services Commission in the Richard Pratt years, when it was known thoughout the industry as the “Anti-Business Unit” and introduced numerous policies that led to the Island losing huge amounts of business to Guernsey. Why not ask people in the finance industry what they think of the good Deputy’s abilities?
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6. Sanity – Mike Higgins original proposal, several years ago was for the banks to finance the depositor protection scheme. This would have been the ideal solution. Due to the then Economics Dept aka Senator Ozouf’s attitude that this was not imperative – it was never brought to the States.
It has taken Mike months to get the actual final documents from the CoM and 6 weeks is hardly sufficient time to call all the witnesses and analyse the documents in depth. The whole of the Economics Scrutiny panel feel this legislation is so important that they are foregoing any holidays (either on or off Island) in order to give this priority). This is the kind of attitude to be respected in our representatives and is indeed putting Jersey people first.
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“The silly thing is that 7 years ago depositor protection could have been brought in. Why wait until the banks are on a knife edge before thinking of Bank deposit protection? Another farce as far as I am concerned.”
The reason why is because Jersey never encouraged the sort of dodgy banks that Guernsey and IOM specialised in. We don’t have the small ex-building societies, we never had BCCI, no Icelandic banks offering 7% here. Not one person has lost one penny because of what you call “this farce”.
But if we had brought in a system before our competitors did it may have driven banks away. So had we gone with Higgins’ proposals when he drafted them the Island would have been the loser.
If locals want depositors protection there is a simple solution: bank with a UK bank. I do, I get internet and phone access, it works fine.
“Why should the taxpayer have to pay for the mistakes of financial institutions? The obvious sensible solution is for this to be funded by the banks themselves as Mike has constantly stated. ”
The reason why the States should partially fund it (in my view the States should fund all of it) is because the Banks are competitors and pay oodles of tax to the States. When Woolworths went belly up the States paid for its redundant staff. People did not say “why should the taxpayer pay for the recklessness of the retailers? The other retailers should pay.”
How is it right or equitable that Bank A, that has traded responsibly and cautiously should be required to pay for the losses caused by Bank B, that has been reckless and has thus taken business off Bank A through undercutting what is commercially viable?
No, if the States will support Woolworths (who paid 0% tax to the Comptroller), they should support the banks, who pay 10%.
But it’s all hypothetical because no bank in Jersey is going to go phut. Thi whole thing i window dressing to score political points, and by delaying it, Higgins has scored an own goal.
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11 Mad foetus…so no bank here is going to go Phut as you put it well that is jolly reassuring,will you give your personal Guarantee on that so we can all sleep soundly safe in the knowledge that a guarantee expert has deemed it so………
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This protection is a pile of rubbish as far as it goes:
It only covers individuals and not corporates or trusts
Whilst it purports to cover local and international clients it is capped at £100 million in any five year period
We actually have at last count £196 billion on deposit so this scheme actually covers 0.05% of the cash on deposit on the island
We have 34 banking groups licensed for deposit taking which would average out at £5.76 billion on deposit per bank which means that on average only 1.76% of the deposits in any one bank are covered so who is first in line?
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You are all missing the point. Its about what the people who invest in the Island think. Any delay simply erodes Jersey’s competitive position in attracting savings into the Island and as a result has a negative impact on the profits of the banks that do business here.
Whatever the merits of Dep Higgins actions this has not helped our finance industry. It beggers belief that with something as vital as this to our finance industry that the states and scruity could not find an accomiodation which sorted this out in short order. After all we have only being talking about this for 7 years now.
Fiddling whilst Rome burns comes to mind!
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mad foetus why wait until the bitter end? Jersey should have been forward thinking years ago and got this is. It is a bit late now isn’t it? I am glad you have confidence in the banking system over here I and others don’t. Ozouf espouses everything is fine and dandy all the time if a subsidary Jersey bank was to go under he would be ****ing himself.
truthseeker don’t listen to mad foetus as he doesn’t appear to know much about finance fro what I’ve been reading.
tricky bang on. Fiddling whilst Rome burns is one of my favourite saying these days, I wonder why it is?
Why should the scrutiny chairman facea vote of no confidence? The vote should go against the CoM as far as I am concerned as I have no confidence in them whatsoever to get anything right!!
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