CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. Jersey Review
  3. Banking Attracts Worldwide Depositors

Banking Attracts Worldwide Depositors



Statistics released by the JFSC in April 2010 showed that over the previous nine years, total bank deposits held in Jersey have increased by more than GBP50bn, achieving a peak in 2007. At the end of September 2009, there were 47 banks in Jersey, holding deposits of GBP170.6bn.

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.


Jersey Industry Insight

E-Commerce, Opportunities in the Island of Jersey
by by Grant Twine, Director, Basel eBusiness Limited



[Back to Jersey Review Index]

Close

Password Reminder

Please enter your email address to receive a password reminder.

 












Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »