30 jobs go at Kleinwort Benson
Wednesday 17th March 2010, 3:00PM GMT.
Thirty jobs are to be lost
ABOUT 30 jobs are to go at private banking group Kleinwort Benson.
But the good news is that 180 Islanders now know their jobs at the group are safe.
Jersey’s financial services regulator has refused to bow to pressure to grant a banking licence to a non-top 500 bank. But the consequence is that jobs will be lost here and new ones created in Guernsey.
A deal was done in October last year for Kleinwort Benson to be sold by Commerzbank to Belgian business RHJ International. That process is due to be completed this summer.
However, that company is not ranked in the world’s top 500 banks, the minimum qualifying criteria for a banking licence to be issued in Jersey. As a result Kleinwort Benson has decided to move its deposit taking operation to Guernsey, subject to regulatory approval there.
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A rather black day for the JFSC adding yet another 30 to the islands growing unemployment list. Surely a bonus of a small jurisdiction is that we should be able to be flexible and look at each case on it’s merits rather than apply a one size fits all rule. KB are not a newcomer and have operated successfully here for many years yet suddenly because their parent company changes Jersey no longer wants anything to do with them? How short sighted. Were the risks to Jersey’s reputation really that great? Could safeguards to limit Jersey’s future liabilities, should this bank go the way Landsbanki did, not have been agreed upon?
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30 More families lives thrown into chaos by short sighted and inflexible States policies
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The States of Jersey have decided not to impose their will on a quango and have instead have devolved their powers to the JFSC.
This is not how a democracy should operate as supremacy of the parliament is paramount and if the States had said that KB should stay then it would have.
The States must learn that they are the masters of the JFSC and not the other way around.
If they want an example look at the UK where the FSA has been reformed by the will of the Commons
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Sadly representative of the tick the box/mechanical regulation of the JFSC rather a more informed risk based approach. And as mentioned, 30 people’s jobs lost in what is an appalling employment market. I expect Guernsey are having a laugh at our expense.
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I wonder what Klienwort’s policy on redundancy packages will be, given that they have been forced to close down their banking division by the JFSC?
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Never rely on a regulator. We did in Guernsey; the GFSC gave us many assurances which turned out to be untrue. Stick with quality, Guernsey accepted the crap and worldwide savers paid the price. The GFSC are now saying if you save in a bank you must do your own research and scrutinise the company accounts before giving them your money. If they go belly up it’s your look out. Yes it makes us question why we need overpaid dummies in the guise of the GFSC. And scrutinising Lehmann Bros and others would not have done you any good. They can legally hide subprime liabilities off balance sheets. Further Sir Victor Blank looked at HBOS accounts before he bought them and he never spotted the 13 billion plus of bad debts. Jersey has got it right, the ‘donkeys’ in our government are a laughing stock. Give me your past and present CM and TM any day. Maybe you can take our CM & TM with the 1st load of rubbish we send to your incinerator.
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This is not the end of it, I am aware of another “large” banking organisation that will be laying off staff at the end of this month.
I’m beginning to think that the finance industry is going through a protracted and lingering demise. The only ones who can not see this are those who hold the island’s purse strings.
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A predictable outcome considering the organisation concerned had banking representation in both islands, one of which has lower standards than the other.
I could certainly see this one comming !
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So Guernsey operates a more “laissez faire” attitude to offshore banking then.
Well that’s hardly a level playing field.
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Ever since Landesbanki Guernsey went belly-up depositors have realised that:
1/The UK will not support non-UK owned offshore banks based in Jersey (quite rightly)
2/There is no deposit protection for non-Jersey depositors if a Jersey bank goes bust
So sensible depositors are moving there money elsewhere.
I certainly wouldn’t keep any money in Jersey, Guernsey or IOM now.
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It would be interesting to know what would happen if one of the main high street banks(Lloyds,natwest,etc) fell out of the top 500.Would they be forced to shut up shop and lay off hundreds of staff! Being in the top 500 doesn’t guarantee that they won’t topple.
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Dura Lex, Sed lex.
If the law clearly says that bank must be top-500 listed in order to get license here, then RHJ International clearly tried to sneak-in avoiding this rule. Do you really think that they didn’t know what they are doing? That they didn’t investigate local Jersey law before committing to the agreement ? C’mon – it was not 10F transaction, and you can safely assume that ALL aspects were investigated, and this was simple crisis-time gambilng – counting that crisis and growing unemployment force JFSC to close their eyes and let them in.
Stop moaning. It is clearly not JFSC who is guilty here. The worst thing is that RHJ International and Commerzbank played their employes’ lives and jobs…
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Surely the KB management are not totally blameless here. I agree that the JFSC are being ridiculously inflexible, but you would have thought that KB or Commerzbank would have looked into the rules before commiting to the deal.
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I canniot beleive that there was not another way to resolve this through sensible reguation. All we have done is to hand the advantage to Guernsey when the real risk is I am sure relatively small.
Still no change really as the JFSC have aways played safe as it is easier and you cannot be critisized for doing so. I hope they can sleep at night knowing that 30 families will be going therough hell!!
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One begs the question who regulates the regulator JFSC have not only shot themselves in the foot on behalf of the island but they made a rod for there own back when they refused Jersey Home loans a licence for the very same reason.
I understand there is 110 in the department another public sector department growing out of control.Sadly the number of jersey tax payers able to pay there wages is diminishing fast as the unemployment queue continues to grow.
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‘This is not the end of it, I am aware of another “large” banking organisation that will be laying off staff at the end of this month.
I’m beginning to think that the finance industry is going through a protracted and lingering demise. The only ones who can not see this are those who hold the island’s purse strings.’
Banks are under pressure to cut costs and staff, consolidate operations and rebuild capital after the great meltdown.
In five years time finance in Jersey will be a lot smaller and slimmer.
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What’s the point causing all that grief for 30 families for the sake of being able to claim the top 500 line?
It would be fair enough not to take on new business unless they’re in the top 500, but existing firms should be able to stay. As if we haven’t got enough unemployed already! That matter should take priority.
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Great stupid states
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How come other emoployers make roles redundant yet it never makes the papers, I understand 20 got warnings today at a major bank – this follows dozens more at the same place last year, yet its never reported ?
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Don’t blame JFSC – the rule is there to protect depositors and the island’s reputation. Serious questions should be asked of the board of directors for allowing the company to be sold to an unsuitable new owner. Have the directors been negligent? If so, can the thirty who have lost their jobs take legal action against them personally?
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I am saddened to hear that more people are to loose their livelihoods here in Jersey, and my heart goes out to the staff who are affected.
In these difficult times this top 500 criteria should be opened up as we cannot afford to loose anymore valuable business, ok you can’t have any Tom, Dick or Harry operating here but I am sure all new incoming Banks will be checked out by the JFSC anyway. To be truthful as we all know, the Finance Industry keeps us all in work somewhere down the line (well it used to anyway) and without the Industry there is a very bleak future ahead for all our children. I urge the JFSC and the States as a whole to take a hard look at the situation as this downturn may not only affect my Daughter personally, but I am sure the people in power have Children,Grandchildren etc who will also face the harsh realities forthcoming unless a more relaxed strategy can be put in place.
In monetary terms these 30 jobs given the average wage In Jersey is around 35k will equate to a deficit of over £210,000 for our Income Tax Department not to mention the knock on effect if those people cut back on their spending habits. Once again have the JFSC taken this into account.
I have based this data on a full year’s loss of salary as a worst-case scenario, however I do hope that all involved will find new employment very soon as not to sound negative.
What actually are the criteria to become a top 500 bank? With what’s gone on over the past couple of years how are the likes of RBS, Lloyds TSB and many more high street banks considered to be top rated when they were only hours from complete meltdown before the UK tax payer bailed them all out.
As many will know Banks and Loan Companies etc obtain a credit rating from specialised credit rating agencies raging from AAA (high grade) to C then D (In default with little prospect for recovery) The main players in this market are the US firms of Standard and Poor’s and Moody’s. I am led to believe that Lehman Brothers who filed for Bankruptcy in 2008 had very strong credit ratings only weeks before they went to the wall? As a note I have just been reading that companies pay these credit agencies to rate their debts and acquire the rating, I am not in anyway suggesting anything here but as you can see these ratings are not always what they seem. Well to be frank,it is no secret that there were some less than honest individuals out there who were able to show healthy balance sheets and may had misled these agencies in some way.
Moving on Ref – comment 6 from Mr Bewey. Do be very careful depositing funds in Guernsey as the Landsbanki savers as an example have found out at their peril. The Guernsey Government and the GFSC have been, how can I put it (what I would like to say would not be published) less than helpful towards the many Pensioners, and ordinary hard working people in Guernsey, Jersey and around the World who had their life savings tied up in so we are told, a well regulated World Class Finance Centre. Once again my heart goes out to all the hard working Guernsey folk who may suffer due to the stance their elected States members have taken on the Landsbanki issue and the apparent loss of revenue that the bad publicity may be attracting
Just as note, before anyone starts slagging off these Landsbanki people for chasing the so called big interest rates, many of the 750 in Guernsey had their money with the Cheshire Guernsey Building Society for decades and were given a Parental Guarantee backed by the GFSC that their savings would be safe. This Parental Guarantee in the end was not worth the paper it was written on. I have spoken to many of these people and have come across some very distressed and deflated individuals and once again I reiterate that it is a disgrace how they have been treated by the same individuals they elected.
Moving on again, sorry about the long post I have written here. We are all reading about black holes etc, I am trying to be positive in suggesting that Mr Ozouf may be the best of a bad bunch to pull us through this downturn, after all he has taken on the many mistakes and overspends from his predecessors and committees before him. I do hope however that he can find a way of finding extra funds without punishing the elderly and less fortunate in our society who due to the demographics some may say marked up prices of the Islands supermarkets find themselves paying almost 30 – 35% extra for food compared to mainland Europe and the UK.
In closing I do think that the States should be reduced by 50%. After all what society has 50 plus politicians running an area the size of a small town. Not all bad eggs, however I am sure many are nodding their heads as a requirement to justify their handsome salaries.
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