A reputation in need of saving
LIKE it or not, Guernsey's prosperity has been earned on the back of financial services. For the last 40 years or so, a lot of people have worked very hard to build the reputation for honesty and integrity which we ought to enjoy. Fortunately, Guernsey has never had a home-grown scandal, not in living memory, and that is fundamentally due to the integrity of the people who have worked in the industry.
It's popular, nowadays, to refer to a 'well regulated' jurisdiction as if nothing else mattered but, if the underlying industry was not sound, regulation wouldn't fix it.
The Guernsey Stock Exchange was set up (if I remember) by the Guernsey Financial Services Commission (GFSC) at a time when the GFSC was responsible for promotion of the finance sector as well as regulation of it. Things have moved on since then but, in the climate of the time, it would have been quite normal for the promoter to sit on the board. For a long time, we thought the stock exchange was a success story.
Suddenly, without warning, the head of the stock exchange departs, replaced by a venture capitalist, and there are rumours of dark deeds and a GFSC investigation, which has been going on for two years.
Venture capitalists do what they do, reorganise, repackage, sell off what they can, fire as many as possible, rebrand the rest and sell out before the problems emerge. Is that good for our long-term future along with all the attendant publicity?
What is the GFSC investigating and why does it take so long? We are not permitted to know but it's damaging to our reputation nonetheless.
What do we say if a client asks about it?
The GFSC, answerable to nobody, is introducing a new computer system called Prism, which was developed by the Bank of Ireland.
It's not long ago that Ireland was in some financial difficulties, but this new system will enable the GFSC to decide which businesses it investigates and which require to be instructed to change their business plan or methods in order to ensure, with quasi-religious zeal, that all imagined wrongdoing is expunged. That's the same businesses I referred to in paragraph one.
As island financial services businesses gradually succumb to more and more rules and regulations, we have now seen a major island success story taken down by an organisation that is not answerable to government or industry but apparently has the power to indirectly remove our chief minister.
It's easy to see how we can give the impression that the island is badly run. We are famous for importing consultants to advise on everything from drains and traffic lights to wind farms but, when it comes to the financial services industry, there is, apparently, some sort of cabal of the great and the good who manage to be placed as commissioners (at £25,000 each) and in similar positions by virtue of some opaque process which is not amenable to examination.
Unfortunately, it seems these people are not up to the job.
Now, of course, the stock reply to all of this is: 'This is Guernsey. There's the Clipper if you don't like it.'
My concern is that I won't be able to get a ticket because it will already be full with business people moving elsewhere.
JEAN SHAW,
15, La Reserve,
Les Amballes,
St. Peter Port,
GY1 1WT.
