This is the Chief Minister's reply to speeches made and questions raised during the debate on the Guernsey Financial Services 2009 annual report. Debated in the Guernsey States Chamber on Wednesday 28th July 2010. It must be understood that this sites interests lie, for the most part, with references to the Landsbanki Guernsey affair. The full debate can be seen HERE.
Bailiff: I see no one else trying to attract my attention so I call the Chief minister to reply on the debate.
Chief minister Lyndon Trott: thank you sir, maybe I should start with the comments made by deputy McManus and remind the assembly in detail what the Director general writes in the report. He tells us that at the start of 2009 the Promontory report produced by Mr Michael Foot CBE on the Commissions handling of the events leading to the administration of Landsbanki Guernsey Ltd was put in the Public domain, that report concluded the Commission had acted appropriately, had measured up to good practice and that there had been no regulatory failure, so it is difficult to answer a question that was posed later I think by Deputy DeLisle to understand sir what justification there could be for an independent inquiry, however there has on occasions bee an attempt to personalise the dialogue between myself and the Landsbanki action group, if members of this assembly wish , in sufficient numbers as is their democratic right, for there to be an independent inquiry, an independent inquiry there will be, up until now there has been no appetite for such an inquiry in sufficient numbers and I sir have drawn the conclusion personally following consultation with policy Council Collegues in particular, that is because there is an acceptance in this house that there was no regulatory failure and that the advice we have received is accurate.
Now moving on if I may to the Issues of compensation because in this report we are reminded that landsbanki depositors have received already sixty seven and a half pence in the pound back and the independent Royal court appointed administrators have advised landsbanki Depositors that it is projected that they may receive up to 91pence in the pound, that is an encouraging position to be in.
Deputy Matthews asked me about the introduction of an ombudsman , I speak purely from a personal perspective having not had the opportunity to discuss this with policy Council Collegues in any details of this matter yet. I sir would favour the introduction of an ombudsman, I think it is a natural extension of good practice and it would be interesting to see whether the introduction of that office had any pan island relevance and I think that would be an appropriate initiative.
Sir Deputy Brehaut asked if a dialogue exists between us and the GFSC with regard to certain startup businesses, there is dialogue, those are considered by policy Council very carefully when the need arise and there was another question, I think it was to do with, from deputy DeLisle regarding liaison with the GFSC and policy Council, under the very able Chairmanship of deputy McNulty Bauer something called the finance sector group meets regularly, thatís populated by the key members of the international business community in the island, representatives from GIBA and the Association of Trustees, banking industry and so on and the Director General of the GFSC has a seat around that table and hears at hand the concerns expressed by those representatives officers and a very sensible and productive dialogue exists as a result of that and I think the Director General does refer to that in his report in a positive way. There is always room for improvement within the boundaries and acknowledgement, the acceptance that the GFSC is a fully independent Commission that cannot be and should not be influenced by this assembly, but we have an obligation to ensure that they are aware of international developments and I think that the FSG sir has that organ.
Iím not sure if there were any other questions of me sir and I see no oneÖÖ..
Deputy DeLisle (interrupts): Sir just to refresh the Deputies mind with regard to my second question which was with regard to improvements through the dialogue that he was talking about between the Government and the GFSC to improve the Deposits Compensation Scheme, I donít think he referred to that although I thank him for making the point that he would in fact welcome an independent inquiry into the Landsbanki issue.
Deputy Trott: Not What I said sir and its important that my word are not deliberately misconstrued, I suspect that on this occasion they were. I said that this is not a matter for me and there have been several occasions where there has been an attempt to personalise this, if sufficient numbers of members of this assembly wish for there to be an independent inquiry, there will be a requete brought forward the funding will be allocated, if the majority wish an independent inquiry to be carried out. What Iím saying I have seen no evidence to suggest that an independent inquiry is necessary. With regard to the depositors Compensation Scheme, thatís a matter for the Commerce and employment department and indeed in the near future, Commerce & Employment department will be presenting to this assembly their views on how that scheme should be improved going forward and at that time deputy DeLisle and other members will have an opportunity to express their views.
When looking at the Chief Minister's replies on the Landsbanki problem, one must realise by now that his replies have been standardised for the past eighteen months or so and very little can be gained from them.
He tends to use the Promontory report as the main stay for his argument and always fails to address any new points or arguments raised.
The fact that he feels that things have been personalised can only be laid back at his door, as from the time Landsbanki Guernsey went into administration, he has personally taken on the political responsibility role and failed to, right from the start, keep Deputies appraised of the full situation. The depositors have not had a Government Political update for one year, since his last brief press release after the visit to Iceland in Aug 2009.
It must be repeated, that the Promontory report was instigated two months after Landsbanki Guernsey went into administration in Oct 2008 (it appeared Jan 2009). Instigated by the GFSC, under their own terms of reference and paid for by them, although the cost of that report is hidden within their accounts. That report cannot be regarded as independent under any circumstances. No statements under oath, no independent witnesses called, no third party questions asked, no documents produced by independent third party request. The final superficial report to say exactly what the GFSC wanted it to say in its conclusions. "No bad faith", "no unreasonable actions," "no regulatory failure,". Those words protected the GFSC from legal action against them.
It is interesting to see in the opening Promontory Notes that, Item 4, Promontory's work on this engagement is limited in nature and may not comrehend any or all matters that might be pertinent or necessary to the receiptient's evaluation of any issues or transaction.
Which perhaps explains the superficial nature of the report and with the mounting mass of evidence already submitted and ignored by both Chief Minister and Policy Council, to contradict the Promontory report, the Chief minister's arguments become weaker over time.
His statement " up until now there has been no appetite for such an inquiry in sufficient numbers and I sir have drawn the conclusion personally following consultation with policy Council Collegues in particular, that is because there is an acceptance in this house that there was no regulatory failure and that the advice we have received is accurate."
is making a decision for the house that they have never been consulted on, not with any in depth accurate information, most i would say haven't got a clue as to the evidence out there that shows that there should be a fully independent Select Committee type inquiry, they have been brainwashed and take the easy way out. An inquiry of that nature may very well prove embarassing to Guernsey's Government and the GFSC, and in particular the Chief Minister who has tried to surpress the issue right from the start.