Banking in Guernsey 2008 - An Overview
Is Guernsey Safe? We Say Not Yet!
Landsbanki

Banking in Guernsey. That well-known crown dependency of the UK, offshore tax haven and a reliable custodian of your cash.

Nestling amongst the safe banks on Guernsey was Landsbanki, an Icelandic owned bank guaranteed by its huge parent company Landsbanki in Iceland. What could go wrong? All these countries are EU, right? Icelandic banks are well-known and reliable, right? Guernsey is a world-class banking haven insulated from grasping Gordon Brown and not stupid enough to invest in US mortgage debt. Our cash was safe in Guernsey we thought.

OK, time to wake up; recession is here. Iceland is not EU. Nor, technically, is Guernsey (although they bow to the EU savings directive and are a UK Crown Dependency).

Well, Guernsey is not safe any more it seems! In October 2008 the Icelandic government nationalized Landsbanki Iceland. In turn, all its affiliates and subsidiaries around the world toppled like a house of cards. Very sad for Iceland. Its currency is worthless and it is begging the IMF and Russia for handouts to survive. We feel for the 300,000 people in Iceland; back to smoked herring on toast for you guys. No foreign holidays for a while until you sell Medvedev and Putin that airbase, adopt the Ruble and stick a finger up to the Yanks who refused to help you in your hour of need.

However, what of Landsbanki Guernsey? Well nobody noticed before, but Guernsey lacked depositor protection. Savers relied on its stringent financial regulation [sic] not to let minnows and “Johnny-come-lately” types into Guernsey.

However, while Lyndon Trott – the big cheese on the island – and some of his cohorts were bigging it up in the Orient on Labrador fried rice at the taxpayers expense, Guernsey was wobbling as a trusted financial centre.

Landsbanki Guernsey is in administration. The administrators have paid out 30% to savers, leaving 70% unaccounted for as yet. Guernsey don’t want to pay. The UK doesn’t want to pay. Iceland is silent on the subject up to now, and everyone else who should be explaining how pensioners, expats, foreign and UK savers and others who trusted their life savings to Landsbanki will be reimbursed, are strangely silent.

This site says: Listen guys, it’s quite simple. You men need to get your act together and your thinking caps on and figure out how you are going to raise eighty-two million quid (or make Iceland do it) to pay off the Landsbanki savers.

If you don’t, Guernsey is finished as a retail financial centre – simple as that. You know it, we know it, and the media knows it. Its all very well of talking of “negotiations” and “working behind the scenes” and lots of other political doublespeak. It boils down to this: If Landsbanki savers lose their cash, your credibility is on the floor. Nobody wants to invest money in a “financial centre” where people lost their cash – it’s that simple!

If people want risk, they can get that earning 17% interest in Ukraine. They can get a government backed guarantee in Russia and 10% interest with no “Grasping Gordon” stealing some of the interest. Why will they mess about for 4%-6% in Guernsey where the cash has a tendency to do a credible impersonation of Houdini? Cash is leaving Guernsey even as you are reading this – only Guernsey can stem that flow by positive action and supplying ongoing information to savers.

Your forthcoming depositor protection scheme is worthless unless it covers Landsbanki Guernsey savers. That is called “closing the stable door after the horse has bolted” – if you can’t pay us, you can’t pay other banks depositors next time can you? Your DPS will have as much value and credibility as one from Zimbabwe.

So move fast Mr Trott & co, speak to the UK and get them to speak to Iceland and the IMF and fix this issue. Later you can backfill with the media and claim you were “working all the time behind the scenes and there was never any danger anyone will not be paid, blah blah”………. You may just regain some credibility. People might just buy it.

If Landsbanki savers lose one penny of their deposits, Guernsey forever will be marked as a place that depositors’ cash is not safe. This site and others will shout that from the rooftops. It will be “RIP” Guernsey as our humorous picture on this page depicts. The picture on this page will become famous.

When Landsbanki Guernsey depositors are paid in full, this site - and its content - will be took offline.

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