The report “shows the government of Guernsey in a very bad light insofar as its actions – or rather, inactions – in managing [Guernsey Landsbanki’s] failure in 2008,” said Mark Ashbey, a depositor and also a member of the Landsbank Guernsey Depositors Action Group, which represents 1,600 British depositors, many of them pensioners, who had an estimated £120m on deposit in the Guernsey-regulated bank when it failed.
“Whereas Landsbanki-owned IceSave depositors in the UK and Netherlands were repaid in full, savers with Landsbanki Guernsey are yet to recover one third of their savings, with nowhere near full recovery in sight,” Ashbey said.
Self-determination called for
As reported here last week, the wide-ranging, 54-page Commons Justice Committee report urged that the three Crown Dependencies be left to look after their own affairs wherever possible, with the UK government becoming involved “only…in the most serious circumstances”.
The report followed a previous Justice Committee inquiry that specifically focussed on the way the UK handled its representation of the Crown Dependencies during the Icelandic banking crisis.
However, this latest report also addresses the handling of the 2008 Icelandic bank collapse, and it is this that the Landsbanki Guernsey Depositors’ Action Group (LGDAG) is seeking to highlight.
‘UK looks after its own interests’
In a section headed “Concerns of the Crown Dependencies about international representation by the UK”, beginning on page 29, the report notes that the dependencies feel the UK tends to look after its own interests ahead of theirs when negotiating on the global stage.
At one point the report criticises HM Treasury for not sending a letter requesting that Icelandic authorities meet with a Guernsey delegation until after the Guernsey delegation’s visit was over.
Later, it notes that the Isle of Man government has expressed similar concerns to Guernsey’s, "in cases where the interests of the UK and [that] island conflict.”
Like Guernsey, the Isle of Man had an Icelandic bank operation fail in 2008.
“[The Isle of Man government] describes the support of the UK in such cases as insufficiently robust, and [it] is concerned about ‘the intractable position of not being able to represent itself, but also not being able to gain the full support of its “representative”’, the report notes.
Among the Justice Committee’s recommendations were that the Ministry of Justice "consider alternative models for the representation of the interests of the Crown Dependencies internationally."
"It is imperative that a means is found by which the islands are represented effectively, and we strongly recommend that certain officials, either from the UK or from the islands, be specifically designated as representing the islands in international negoations," the report notes.
The Ministry of Justice is the UK Government department responsible for the administration of the UK’s administration of the UK’s relationship with the Crown Dependencies, although overall responsibility for that relationship is shared across Whitehall.
