1

Matt

At least States Members who are known critics of Jersey’s Finance Industry will be smiling.

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3

Jean the Bean

Shame

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5

Pip Clement

Over the next decade or so there are going to be banks looking at rationalising their operations.
Staff will be let go and there will not be many more employed elsewhere.
Computers are going to replace people in the finance industry.
But we have the States master plan to secure the future, we will all work for them, the slight problem is who will pay the taxes…

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7

Peter Anthony Troy

The report quotes:

Spokesman Tom Anen said: ‘The review clearly showed that we did not have the critical size required in the Jersey private baking operation to create sufficient synergies with other entities in the Dexia group.’

In non-corporate speak this means that the Bank did not have the confidence to expand their operations in Jersey against a background of significant changes in the finance industry and Jersey being the victim of huge regulatory control.

This is one of many examples, all be it a small one, of the large problem facing Jersey’s finance industry. The industry is primarily owned by organizations whose key decisions are made outside the Island. Clearly more decisions of this type are being made or will shortly be made.

The view of Jersey’s finance industry form outside is that it is about to be swamped by change. With regulatory changes that have occurred and those that will occur in the near future Jersey is a less attractive for investors now than it has been for 25 years. Despite the Channel Islands being outside the EU they remain in effect bound by EU regulations and political control.

Alas more job losses, with little prospect of long term recovery, is the bleak future for Jersey’s finance industry.

The solution, if one is possible, is for Jersey’s Financial leaders to understand the threat the EU poses for their prosperity, resist much of the future restrictive regulation (which is possible), abandon the culture of greed, face realism in the eye and then to lobby Jersey’s political establishment with the detail of the negative effects of EU regulations.

Peter Anthony Troy.

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9

Old Jerseyman

Mr Troy (comment no 7)is quite correct. upto the late 1960′s Jersey’s economy was made up of local small businesses who made all their own decisions. Now most of the employers of Jersey people are off Island big companies that care more about their millions of payout rather than the well being of Jersey.

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11

Peter Anthony Troy

The difference between Singapore and Jersey is that the former’s finance industry is not subject to additional EU regulation, which will by the end of 2010 will have damaged Jersey’s finance industry beyond repair. The problem is that Jersey people are oblivious to that fact.

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13

Pip Clement

Singapore is an city state with an area of 274 square miles, 4.9 milion people, etc.

Jersey is a bailiwick with an area of 45 square miles, maybe 90,000 people, etc.

Peter Troy may as well compare France to Monaco, we will never be in the same league.

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15

Peter Anthony Troy

In response to comment no 12 it is not arrant nonsense that the EU will seriously damage Jersey’s finance industry.

If the leaders of Jersey’s largest wealth creating industry do not fully understand and address the salient issues of that threat the Island’s economy will suffer a serious blow.

The finance industry in the UK and in the Channel Islands will soon have to learn new EU agency titles: the European Banking Authority; the European Insurance and Occupational Pensions Authority; the European Securities and Markets Authority; the European Systemic Risks Councils, since all four EU agencies will impact on Jersey’s finance industry within 12 months.

These new agencies will not only provide jobs for enthusiastic regulators across Europe, they will have extensive binding powers to investigate and oversee cross-border banking, insurance, pensions and securities and can issue binding orders to resolve disputes between member states and close trading partners. This will impact on Jersey just as much as it will do on the City of London.

More worrying is the devil in the detail of the extra regulation that the new authorities will produce. This is a point that, in my experience, senior leaders in Jersey’s finance industry fail to understand.

Whilst I appreciate that the threat is political in origin and thus a turn off for most operators in the finance industry – the coming additional regulation I argue will damage the ‘wealth factory’ of Jersey perminantly.

It is a fact that the EU will shortly implement a voting structure for its new apparatus of financial regulation that would make it almost impossible for the UK (or Jersey) to block measures, even if they pose a major threat to the City of London and consequently our dear Channel Islands.

The EU Commission will implement a simple majority voting system (SMV), making it far harder for the UK to mount a “blocking minority” with like-minded allies. Thus, Malta or Slovenia would have the same voting weight on financial regulation as the UK which is of course the world’s banking capital.

Apparently the EU Commission hopes to use the procedures within the technical committees for the three new financial regulatory authorities. The regulators, therefore, will be able to impose their rule over the heads of the UK government; such is how the EU works.

The key and unreported fact is that when the member states agreed to binding EU powers at the EU finance meeting (Ecofin) in May 09 and later at the June EU leaders agreed to the transfer of ultimate control over the ‘City’ from London to Brussels regardless of any voting charade. Thus Brussels controls Europe’s finance industry not the politicians of the member states.

Since over 60 per cent of Jersey’s work force are employed in the finance industry and its dependent components and despite the fact that Jersey is not in the EU – the EU effects Jersey, particularly as regards financial regulation and employment law. EU politicians and bureaucrats are extremely good at deceptive implementation and therein lies the problem of understanding the threat but the negative impact of additional EU regulation on Jersey is avoidable. It will take first understanding and secondly appropriate focus.

Based upon three decades of reading, writing, campaigning and giving presentations on the effects of the EU from Estonia to Edinburgh I am convinced for the reasons that I have summarised above that the EU will irrevocably damage the finance industry with 18 months unless serious political and business opposition is mounted very soon.

Peter Anthony Troy. St Saviour, Jersey CI

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