LANDSBANKI DEPOSITORS ACTION GROUP WELCOMES FINDINGS OF ‘HOUSE OF COMMONS TREASURY SELECT COMMITTEE’
Committee Calls On UK and Guernsey Governments to Work Together
& Recognises Depositors’ ‘Severe Distress’
The Landsbanki Guernsey Depositors’ Action Group (LGDAG) today welcomed the findings of the Treasury Committee report which quoted evidence given to the Committee by members of the failed bank.
The Committee felt that the Crown Dependencies should work closely with the UK to resolve the issues surrounding offshore banking practices as well as the losses that savers had experienced following the bank’s failure. The LGDAG has and continues to pressure the UK and Guernsey Government to do this and as a matter of urgency. The Committee further stated that there needs to be better regulatory communication between the Crown Dependencies and the FSA. It also felt that the UK had no responsibility to protect savers who deposit money in accounts held in its Crown Dependencies even though saving ‘offshore’ is implicit in FCO (Foreign & Commonwealth Office) advice to expatriates.
Matthew Dorman, spokesperson and Director for the LGDAG, said, “‘The report cites the actions of the Chancellor, the FSA and the Treasury as contributory factors towards the collapse of Landsbanki and Kaupthing. It recommends that the Crown fulfils its Constitutional responsibilities to both Guernsey and the Isle of Man and that the UK and Crown Dependency Governments work together to recover savers’ deposits. I hope now that we will see tangible action on the part of Government to achieve this and that in turn it will shoulder its moral responsibilities to resolve an issue to which in part it contributed. LGDAG has called for urgent revision of the current regulatory controls implemented by the banks which discriminate between resident and expatriate British citizens, contrary to existing legislation. It also calls now for a round table meeting between the UK and Guernsey Governments and affected savers to discuss a timely path towards recovering all lost deposits”.
The Committee supported comments made during evidence given by LGDAG’s Neil Dickens that savers in Landsbanki Guernsey were not ‘tax dodging millionaires’. The Committee stated that, ‘we think it is important to note that the majority of those affected are not sophisticated investors of high net worth who are somehow insulated from the losses they have incurred.’ (Recommendation 11)
Citing comments attributed to the Chancellor, that the Crown Dependencies were a ‘tax haven’ the report stated that if the Chancellor had concerns of tax evasion then this is a legal matter which should be investigated. The LGDAG is in full agreement with this statement and has refuted such assertions by the Chancellor on a number of occasions. The vast majority of the savers affected by the collapse of Landsbanki Guernsey are either residents of the Channel Islands to whom Landsbanki Guernsey was a high street bank or British Expatriates prevented from opening accounts with UK banks through the banks’ and building societies ’’Know Your Client’ guidelines, Quoting research undertaken by LGDAG member Emma Bergh-Apton which established that only two UK banks would accept British Expatriate depositors, the Committee recommended that the FSA undertake work to identify why provision is so poor and report back on steps to be taken to ensure better provision.
The Committee further criticised the actions of the FSA, noting that both Guernsey and the Isle of Man expressed concern over the level of the FSA’s communications with them during the crisis and stated ‘we note with concern the suggestion that the paucity of information provided by the FSA may have impeded the ability of the regulators in the Crown Dependencies to safeguard their own financial systems.’ They further recommended that the FSA ‘review its existing powers and strategy for dealing with other jurisdictions’.
The LGDAG has since raised a number of issues with the FSA, the Treasury and the BBA concerning the actions of authorities and regulators and again calls for an urgent review into the actions of the Treasury and FSA.
For interviews and comment from LGDAG, please contact Nick Carter at Mandate Communications on 020 3128 8109.