| The
first quarter of 2010 saw an increase of 7.5%
in total banking deposits to GBP177.6bn (USD258.5bn)
as the recovery got under way, with a notable
contribution from the Far East.
Geoff
Cook, Chief Executive of Jersey Finance –
the promotional agency for the island’s
finance industry, commented: “The improvement
in the deposits attracted from the Far East is
an encouraging development as Jersey has been
actively focusing its efforts in engaging with
emerging markets . . . Jersey Finance will continue
its intensive programme of business development
visits from which our members are already reaping
the rewards, with some important business wins
from emerging markets such as India and China.”
In
2008, the annual profit of the banking sub-sector
was GBP1.16bn, a fall of 3% (about GBP40m) on
2007. This decrease represented the first fall
in profits for this sub-sector for four years.
In
addition to commercial banking, asset management,
foreign exchange and securities trading, Jersey
banks have recently become involved in a number
of large securitisation programmes. The creation
of the Channel Islands Stock Exchange has encouraged
the development of a larger capital issuance sector.
The issuance of SPVs (Special Purpose Vehicles)
and Covered Warrants has been a rapidly growing
business for Jersey.
Banks
can operate as limited companies or branches;
or, in response to growing pressure on local resources,
as managed units whereby another bank acts as
a local manager, without the need for additional
premises and staff.
All
banks in Jersey are supervised by the Financial
Services Commission under the Banking Business
(Jersey) Law 1991 and accompanying regulations.
An initial fee is payable on registration, and
there are continuing annual registration fees.
In
November 2009, Jersey’s States Assembly
approved legislation to establish a Depositors
Compensation Scheme (DCS) in the island with immediate
effect. The scheme provides protection of up to
GBP50,000 per person, per Jersey banking group,
for local and international depositors in line
with international standards. An interim payment
of up to GBP5,000 will be made within seven working
days and the balance of compensation within three
months. The maximum liability of the scheme will
be capped at GBP100m in any five-year period,
and the majority of the cost of the compensation
will be borne by the banking industry, with the
States making up any shortfall.
Welcoming
the introduction of the scheme, the Minister for
Economic Development, Senator Alan Maclean, said:
“We have always believed that the best protection
for depositors lies in the strength of Jersey's
banks, all of which are in the top 500 banking
groups in the world; and in our sound regulatory
position, which is designed to prevent the bank
failure occurring in the first place.”
“However,
it is important to be able to provide depositors
with the additional reassurance that this statutory
Depositors Compensation Scheme will give. This
scheme provides an appropriate level of protection
for depositors and meets the latest international
standards.”
In
early 2010 Jersey announced plans to regulate
and supervise the providers of payment services
in order to pave the way for the island to join
the Single Euro Payments Area (SEPA) as a non-European
Economic Area (EEA) jurisdiction. The SEPA is
an EEA-wide initiative that is designed to enable
individuals and businesses to make and receive
payments in euros - within national boundaries
and cross-border (within the SEPA) - under the
same basic conditions, rights and obligations.
Currently,
the geographical scope of the SEPA encompasses
32 countries: the 27 European Union member states
(which includes the United Kingdom), Iceland,
Liechtenstein, Norway, Switzerland and Monaco.
The
key aim of the SEPA is to improve the efficiency
of cross-border payments and turn the fragmented
national markets for euro payments into a single
domestic one. The SEPA will enable customers to
make cashless euro payments to anyone located
in a SEPA country using only a single bank account
and a single set of payment instruments (for example,
by means of SEPA-standardized credit transfers
or direct debits).
The
Jersey government has considered the pros and
cons of Jersey seeking admittance, as a third
country, to the SEPA following discussions with
the Commission and the Jersey Bankers’ Association,
and has reached the conclusion that Jersey is
likely to be placed at a competitive disadvantage
if it does not obtain admittance to the SEPA and
should therefore make preparations to support
a future application.
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