Guernsey 'well placed for any form of Brexit'

Amid various potential risks facing the island’s main industry, this assessment has been delivered by the Guernsey Financial Services Commission.

Director-general William Mason, writing in the regulator’s latest annual report, said that 2019 was ‘likely to be a year in which prudential risks’ rose as the global economic cycle cooled.

But on Brexit, he said: ‘By the time this report is published we will probably know to some degree what has happened, or not happened, so I’m not going to speculate in early January.

‘Suffice it to say that through 2018 we have had extensive liaison with HM Treasury (in conjunction with the States of Guernsey and our Jersey counterparts), the Bank of England and the Financial Conduct Authority and we are comfortable that, from a financial services perspective, Guernsey is well prepared to continue to work closely with the UK to handle whatever sort of Brexit is executed.

‘It is worth repeating that, unlike the UK, Guernsey has never been part of the EU’s single market for financial services and thus the UK’s exit from the EU has little direct impact on Guernsey’s terms of trade in financial services with European Union member states.’

GFSC director, risk and financial stability, Katherine Jane said: ‘As noted within the director-general’s report, our ability to predict the outcome of Brexit at the time of drafting this report is severely limited – even the football-predicting octopus would be having trouble.

‘However, the commission believes that the Bailiwick of Guernsey is in a strong position to be able to deal with any challenges it faces.’

Accompanying Brexit, there were also ‘likely to be a range of opportunities for the financial services sector in the Bailiwick’.

‘The draft statutory instruments issued by the UK in the event of a no-deal Brexit demonstrate an awareness that European funds would need to be able to sell/operate in the UK post-Brexit if UK customers are not to have their investment opportunities restricted,’ she added.

‘Any amendments to the UK’s processes in this area will not just benefit EU funds but would also benefit funds located in other reputable third country jurisdictions such as the Bailiwick.

‘As a jurisdiction which has not joined the EU’s single market, the Bailiwick’s financial services industry is less affected by Brexit than the City of London and as our chairman points out is well placed to be a haven of stability in times such as these.’