Bank falls foul of ‘top 500’ rules
Thursday 28th January 2010, 3:00PM GMT.
Kleinwort Benson’s offices in West’s Centre. Picture: TONY PIKE (00878234)
THE future of more than 200 jobs at one of Jersey’s most established banks is in question after it was bought out.
The Jersey Financial Services Commission is investigating whether Kleinwort Benson can continue to legally operate in the Island after it was bought for £225m by a Belgian investment holding company.
There are concerns because the new owners are not in the top 500-rated banks in the world – something which the JFSC expect to see from any banks or finance houses operating in the Island. The JFSC has confirmed that it is in ‘active dialogue’ with the bank.
Kleinwort Benson announced in October that they were being taken over by Belgian company RHJ International, but the new owners are understood to fall well outside the top 500 banks.
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Why didn’t the JFSC say something in October when KB announced that they were being taken over by RHJ International? It’s a bit late now!
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Didn’t Jersey Home Loans apply for the same but were turned down as not in this “500″ list.
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Guernsey will be laughing all the way if we enforce this and rules win over jobs! I can understand if they were new entrants but to enforce this as a result of a change that is not their fault is madness of the worst sort. Are we such an important centre that we are so rigid! What about the consequences for the staff and the islands economy. Think again Sumner!!
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That will be another golden egg, thats fallen out the basket.
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RHJ Holdings are considerably more solvant than many of the so called top 500 banks. Ceratanly morse so than the LoydsTSB and RBS/NatWest group was prior to UK state intervention.
The top 500 listing is an out of date assurance of any banks credability.
The 200 jobswere more vunerable at KB prior to its aquisition.
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A comedy of errors! wait for the States to fudge this one and “allow” the necessary permits, all hail the Money God!!!
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As this bank has an operation in Guernsey, the option is there to simply consolidate the operation in one island, I would have thought.
Not sure how negaotiations have got this far without realising that regulatory approval would be required.
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Rules are Rules.
Jerseys rule is top 500 or your out…ask Jersey Home Loans! and the many other banks kicked out.
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I thought the whole point of the top 500 rule was to guarantee that the island’s finance industry was beyond doubt because it was extraordinarily unlikely that a bank would ever fail.
If we allow Kleinwort Benson to operate despite no longer being in the top 500 we will be sending a clear signal that other banks can get in by buying a subsidiary of an established bank.
The island is going to face tougher competition from cheaper jurisdictions with a lighter regulatory regime.
We can stick to the our ‘gold standard’ or we can lower the bar as we seek to compete.
Lowering the bar however risks the possibility of a major financial scandal.
Tough call for the States!
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Oh never mind! Just bend the rules a bit and file it away under “other”. Think of the fees first!!!!!
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Unfortunately the JFSC are totally unaccountable for their actions. Our ministers have been taken in fully by the scare tactics of the commission and those in scrutiny don’t seem to understand and therefore ignore the problems created by such unaccountability.
Over the past decade our financial services industry has been devastated by the over regulation imposed by these jobs worth’s who answer any resistance from the industry with threats and intimidation.
Maybe this crises that will bring this to the forefront and the likes of Deputy Hill and other active scrutiny members can start investigating the legality of many of the decisions made by the commission.
The “top 500” rule is there because none in the commission have the knowledge to properly undertake and risk review applicants and the Commissions total reluctance to accept any responsibility has turned away much very good business for the Island. These people pay themselves a lot of money – it is time we had an independent body, perhaps similar to that of the Police complaints authority to make them account for their actions, or indeed lack of action.
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The Commission should be looking at the strength of the Balance Sheets of any bank applying to operate in the Island or already operating in the Island.Any competent Chartered Accountant can tell whether a business is viable or not by looking at Balance Sheets.
It is obvious that from what has happened to the banking industry in the last two years that Balance Sheets were not being looked at closely enough.
I am a retired Chartered Accountant and am appalled at the way some businesses and public authorities waste money.
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11 Sanity.. Well said if this keeps up the JFSC will kill off the whole of the finance industry..and then congratulate themselves on a job well done. The truth of the matter is that they are populated by staff who could not hack it in private industry and it shows!
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Well now, the JFSC + Ozouf & Co are in a bit of a quandrum. The finance world has changed dramatically over the last 18 months. Only last year they blowed their own trumpet for not having allowed the Icelandic bank in which gave Guernsey such a headache. If they allow Kleinwort Benson to continue here even though they are own by a Belgian company which falls well outside the 500 rule they will set a precedent and others would demand to do business here. But hey is there a queue of finance houses who actually would like to come here ? They simply cannot allow these 200 people to be made redundant in the current climate. Our finance industry has reached its peak and no longer can Jersey dictate who they will let in. The finance industry rules the island, can now choose from a large pool of quaulified workers, will pay no taxes and will leave when they want. The JFSC will simply become their pawns and their credibility is at stake here ( so are their chiefs inflated salaries ) My guess is that they will drag this out, try to smother / bury the news and perhaps will demand some type of bond from the Belgian parent. I know nothing about them but if they are asset strippers they might well tell Jersey to go to hell, sell KB or consolidate with their other businesses. This is a crossroad and there will be many head scratched as to what to do here. Interesting times !
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It is not the things on a bank’s balance sheet that you have to worry about but the off sheet activities.
One thing that is certainly true is that if there was a major scandal in the island it would kill the finance industry stone dead.
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