Guernsey Press

'Guernsey must continue to be one of the good guys'

WHERE next for Guernsey as an international finance centre, not just next year but over the next five to 10 years? Will Green spoke to William Mason, director general of the Guernsey Financial Services Commission, as the regulator launched a number of important initiatives

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Guernsey Financial Services Commission director-general William Mason. (Picture by Adrian Miller, 29030954)

BUILDING on Guernsey’s track record as an international finance centre, innovation, being a complementary part of the British family and regulation aligned to international standards – these are key areas identified by William Mason as central to the future for Guernsey’s economically-critical finance sector.

Unpicking details of these strands, he says: ‘We should be seen as one of the world's serious wealth management centres. We want to be seen as reliable, dependable, helping families manage their assets securely through the generations, I think that's one core theme for us. We've been doing it now successfully for 50 or so years and you want to grow on your strengths.’

Guernsey can also be a thriving specialist insurance sector with good links to other countries’ markets, with general reinsurance and life insurance being part of that picture. ‘Certainly, we as commission are taking some initiatives to try to help continue building on those strengths we currently have,’ says the director general.

Being a fund hub is another opportunity to develop – not least with the potential for Guernsey to be treated more fairly in terms of access into the UK when it leaves the European Union. ‘The advantages which Luxembourg and the Republic of Ireland have enjoyed vis-a-vis the UK in recent years through being in the European Economic Area while we've been outside the EEA go on the 31st of December. We should be able to grow on our strengths on private equity and alternatives to offer a wide platform for funds, for tax transparent asset gathering from around the globe.’

Mr Mason also explains that from a financial services perspective Guernsey will be less affected by Brexit because it is already outside the EU Single Market. But he reiterates confidence that access to the UK market will become fairer. ‘I see us, and I hope others will see us, as being a complementary part of the British family.

‘We have certain niche areas of expertise, which are very complementary in terms of gathering assets, which are partially managed through the City of London thereafter, and ourselves. And indeed, with our cousins down in in Jersey, we both help contribute to making sure that London can remain the predominant international financial centre on the globe.’

The regulatory framework

Underpinning a strong finance sector is effective regulation, stresses Mr Mason. ‘The framework will adapt and change. At core, there has to be a continued alignment with international standards. That's vital because we are an international financial centre.’

To this extent, he is pleased the States has passed legislation in this area which it is hoped will come into force next year. ‘That will help provide my counterparts overseas with assurance that Guernsey continues to be one of the good guys in terms of international finance, which is vital for our future market access prospects.

‘If you're looking for enhanced market access to the UK, the US, participation in UK future free trade agreements, it's very important for us to be able to show that we are regulating appropriately to international standards.’

More widely, he says Guernsey should be seen as ‘part of the solution’ when it comes to supporting projects around the world that make a positive difference. That includes in the post-Covid-19 world with the island being able to funnel money into projects to rebuild countries’ economies and create high wage jobs.

Green finance and innovation

With the switch to decarbonised economies globally, Mr Mason highlights how the commission designed and developed the Guernsey Green Fund – and says it would like to see that ‘enhanced’. Work to ensure greenwashing is not being endorsed is also planned. ‘We want the Guernsey brand to mean something there. So that's pretty positive,’ says the regulator.

It is also important for firms in the finance sector to start having conversation with clients about what their intentions are in relation to sustainable finance. ‘We're certainly not saying you must shift entirely out of brown into green overnight. That would be very foolhardy. They ought to be thinking about what their clients want them to do in order to be retaining those clients going forwards.

‘Secondly, what pools of green assets can they onward invest in which will provide safe and sustainable returns for their clients? There needs to be a shift, which is happening globally, and Guernsey needs to be part of that.’

A new insurance capital regime to give a ‘nudge’ to say to the sector that is okay to be invested in green assets is another initiative.

On the FinTech side of things, the GFSC is an active member of the global network for financial innovation run by regulators. Mr Mason also says he is hopeful proposals to provide some ‘middle ground for sensible proper regulation’ of FinTech firms will be backed by deputies early next year.

Optimistic about the future?

We conclude the conversation on a realistic but optimistic note - reflecting on how the island’s response to the Covid-19 pandemic has reinforced its reputation as a safe place, not least for people to put their wealth for future generations.

‘We can't sit on our laurels but I certainly remain very much glass half full about the future. I think we've got a lot of strengths and we can work to sensibly develop them and continue to provide good employment for lots of people on Guernsey,’ says Mr Mason.

  • Listen to an in-depth interview with William Mason on the latest edition of the Channel Islands business podcast. You can listen on Spotify, Apple podcasts, Anchor and other good podcast platforms.