Landsbanki depositors let down by Government

You're probably wondering why and who put the kibosh on Deputy Parkinson's genius? For an answer, you need look no further than the Chief Minister at the time. Was it a pure lack of insight (it wouldn't be the first time), was it pure belligerence (possibly). The bottom line was that it was pure stupidity on the part of the Chief Minister as not only did many people lose their savings – indeed many have passed on and never got to see even 92% of their savings – but the Chief Minister's action left an indelible mark on the island's high street finance industry. Some say it will never recover.

Blame the economic downturn, blame the UK Government, blame the people of Iceland – he got very good at that. He even turned on honest depositors, otherwise facing the theft of their hard-earned money.

Some of the people of Guernsey have cried, 'well, it's your own fault!' by placing it in an unsafe jurisdiction. Try telling that to the Foreign and Commonwealth Office.

Some say that it was an unsafe bank. Try telling that to the depositors of cosy Cheshire Guernsey, the bank's predecessor. Try telling that to the bank's parent company, who gave a guarantee. Try telling that to the GFSC, who oversaw it all and messed up royally.

Deloitte – the administrators – have been great, although you can't help but notice that in their fees they've cost us our missing 8%, aside from lost interest owed.

The people of Guernsey should take stock and reflect upon the, at moments, desperate pleas, particularly the island's senior citizens made, not for their savings but for their money – to live. Who could blame them? They needed help.

Perhaps the people of Guernsey should now also take stock of their own savings and the false promises and guarantees?

One would hope that the current Government would take a far more visionary stance than its predecessors, but knowing who's currently head of Guernsey Finance, it doesn't exactly instil confidence.

So the bottom line is that I've lost twelve grand, had it stolen to be clear – with no redress. No help, no 'parental guarantee'.

The Landsbanki Depositors Action Group are all pretty much in unison in feeling 'silly ol' Chief Minister of Guernsey. You could have had it right'.

The bank that went under in the Isle of Man had ten times as much on deposit and everyone got 100% back – plus interest. Their Chief Minister came to the rescue and in so doing saved the island's reputation on the world stage.

Instead, do a Google search and you don't have to search long to discover Guernsey's banking failure and indelible 'black mark'.

As an action group, we've lost just under £10,000,000 (ten million). Guernsey has lost a whole lot more.

CHAIRMAN,

The Landsbanki Guernsey Depositors Action Group.

Editor's footnote: Deputy Lyndon Trott, vice president, Policy & Resources Committee replies:

Landsbanki Guernsey Limited went into administration in 2008 following the collapse of its parent company Landsbanki Islands HF during the financial crisis of the same year. The Royal Court appointed joint administrators from Deloittes. In 2010, Landsbanki Guernsey Limited went into liquidation and the Royal Court appointed the former administrators as liquidators.

The collapse of the bank was not due to any failure in government or regulation. In 2009, a report by the Promontory Financial Group said they found no evidence of regulatory failure by the Guernsey Financial Services Commission (GFSC). It was found that there was no proof that the GFSC acted knowingly or recklessly to put Landsbanki Guernsey depositors at risk.

The Landsbanki Guernsey depositors have now received recoveries to the value of 92p in the pound because of work by the Royal Court-appointed joint liquidators. This is above the level that it was estimated by the joint liquidators in 2011, which was between 87 and 91p in the pound.

The Guernsey Banking Deposit Compensation Scheme, which came into force on 26 November 2008, now protects depositors. However, the scheme could not be retrospective in operation and applied to Landsbanki Guernsey deposits. For the States of Guernsey to have 'backed' Landsbanki Guernsey depositors in the manner that the letter writer suggests would have directly involved spending taxpayers' money to cover the residual losses not recovered by the Royal Court-appointed joint liquidators.

It was the clear and consistent view of the States of Guernsey that it should not spend public funds in this way. While I was Chief Minister between 2008 and 2012, I gave my full support to the Royal Court joint liquidators to assist them in fulfilling their important role in looking after depositors' interests.

By exceeding expectations it demonstrates the expertise and competence that that we expect from the local finance industry. In its actions the joint liquidators worked hard in the interest of all depositors in Landsbanki Guernsey Limited. The actions they have taken to recompense depositors should be commended rather than criticised.

I am firmly of the view the interest of depositors have been balanced with the need to protect potential losses to the taxpayer for a situation which was beyond the States of Guernsey's control. It would have been completely unacceptable to the majority in our community, if the public services of the Bailiwick of Guernsey had been deprived of taxpayers' resources in order to compensate depositors for consequences that were entirely outside of their representatives' direction or culpability.