Finance industry risks attracting bad press
THERE are two main ways to attract a bad reputation as a financial jurisdiction. One is to have companies which operate in it involving themselves in dubious practice. The other is to have a regulatory system which behaves in less than transparent fashion when it is under the microscope. The noble efforts of yourselves and your sadly anonymous correspondent (whose letter you published on 3 September) failed, on balance, to produce a response from the Guernsey Financial Services Commission which reduced the confusion regarding the regulatory position as far as the Providence case is concerned. Most people I have spoken to do not understand how it can be that a Guernsey court is empowered to wind up a finance company (in this case the parent company) which the GFSC is not empowered to regulate. I certainly don't. How many other similarly structured enterprises are operating in the Guernsey finance sector?
It's Guernsey Finance's job to promote the industry around the world and that job is surely harder (and therefore probably more expensive) if the Guernsey industry or its regulatory framework is deficient. The Guernsey taxpayer has poured millions into Guernsey Finance which itself is hardly the most transparent of organisations (try finding out exactly how it has spent that money), so if we are going to fund it, I imagine we'd like its job to be as easy as possible.
The thrust of your correspondent's letter was that the Providence investors and staff are entitled to answers from the GFSC as to why it didn't act sooner, and I don't disagree although as he/she says, surely they, as well as the GFSC, must have smelled a plague of rats given the rates that were publicly on offer.
I further contend that if the finance industry wants taxpayers' money for promotion, the taxpayers are entitled to know what is going on.
In the meantime, I hope that all of the Providence tentacles have been duly snipped.
MATT WATERMAN,
Flat 2,
3, Burnt Lane,
St Peter Port, GY1 1HL.
