Released by States of Guernsey Policy Council

STATEMENT TO THE STATES OF DELIBERATION
BY CHIEF MINISTER DEPUTY L S TROTT

WEDNESDAY 29 OCTOBER 2008

Question from Deputy S McManus:
Given widespread local concerns, is the Chief Minister now in a position to furnish the Assembly with an update on any developments surrounding the recoverability of funds deposited with Landsbanki (Guernsey)?

Chief Minister Deputy Lyndon Trott:
I am pleased to provide Members with an update of developments surrounding the recoverability of funds deposited with Landsbanki Guernsey Limited.
In doing so it must of course be clearly understood that my comments are in respect of political developments which have taken place and not in respect of the work of the Court appointed Joint Administrators who are in direct communication with depositors and issued public statements as appropriate. It is vitally important that any actions by the States do not interfere with the independence of the Administrators.
On 22 October I wrote to the Icelandic Minister of Finance (Arni Mathiesen) seeking his support to ensure that undertakings of financial support previously provided to Landsbanki Guernsey Limited from its parent were honored.
My letter followed an earlier similar request made by the Guernsey Financial Services Commission in a letter dated 13 October to the Icelandic Regulator.
As Members will be well aware I was in Helsinki yesterday signing Tax Information Exchange Agreements with the 7 Members of the Nordic Council. In my letter of 22 October I had anticipated meeting the Finance Minister and had requested a discussion.
I was pleased to have a discussion with Mr Mathiesen after the formalities of the TIEAs were completed. I reminded him that Guernsey had accepted the UK Treasury’s offer to represent us in any formal negotiations with the Icelandic Government on our behalf What I asked for in the letter and was able to repeat was for his personal intervention in assisting the recovery of:

• £12m owed to the Guernsey subsidiary by its parent

• Support in relation to the £36m placement with Heritable Bank which is a UK based fellow subsidiary

• And, significantly, the performance of the parent company guarantee

I was very pleased to receive the Finance Minister’s personal assurance that we would receive a formal response very soon, as would the Financial Services Commission. In a further gesture of goodwill the Finance Minister gave me his personal mobile phone number and accepted an invitation to visit Guernsey at an appropriate time.
Now we anticipate receiving the answers posed in the letters very soon, probably as early as later this week or early next week. We intend to analyze these answers extremely thoroughly with the assistance of the UK Treasury, as we have accepted their offer to assist us in negotiations.
Following this analysis we undertake to provide every member with a copy of our views and thoughts and any further update available at that time.