Guernsey Not Greatly Affected By Market Fluctuations

by Robert Lee, Tax-News.com, London

09 July 2002

Recent fluctuations in the world's stock markets have not had a marked effect on Guernsey's finance industry, according to a report in the Guernsey Press and Star at the weekend.

'We are cushioned against what has happened around the world,' Paul Wood, stockbroker at Collins Stewart, explained to the newspaper on Sunday. 'Obviously, as result of the poor market, people are not buying and selling shares as much as they were, and that is costly to the Channel Islands market. But apart from that, there is no tangible effect.'

However, according to Mr Wood this may not last much longer, as shockwaves from other events - such as panics over new terrorist threats and accounting scandals - are likely to have an impact on the jurisdiction's finance centre.

Also speaking to the local newspaper, Peter Rose, Chairman of the Association of Guernsey Banks supported the Collins Stewart stockbroker's suggestion, revealing that: 'I think it is unavoidable that Guernsey will be affected. Income here is based on the value of portfolios and it's also relevent because some banks lend against share portfolios.'

Mr Rose went on to explain that although the Island's banks are not likely to be directly exposed to fluctuations in the outside world, a lot of their income is. However, this is not necessarily a bad thing for Guernsey's banking sector:

'If the pound strengthens against the US dollar, they could end up profiting rather than losing,' the banking association chief explained.

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