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Guernsey's Chief Minister Questions Onshore-Offshore Divide

by Jason Gorringe,, London

14 December 2009

Guernsey’s Chief Minister, Lyndon Trott, told a major London conference that the island should not be "dismissively" compartmentalized as an offshore financial center.

He was speaking at The Future of Onshore and Offshore Financial Centres Conference alongside Jeffrey Owens, Director of the Center for Tax Policy and Administration at the OECD, and Michael Foot, Chairman of the Promontory Financial Group and author of the recent HM Treasury commissioned report into the British Crown Dependencies and Overseas Territories.

The Chief Minister said the onshore/offshore distinction was outmoded in the modern globalized economy. Instead, he highlighted the island’s position in the Global Financial Centres Index (GFCI), in which, in September this year, Guernsey was ranked 15th in the world.

“For a small island with a population of 62,000 people that’s something we are immensely proud of. Although we are small in terms of land mass and population, we punch above our weight,” said Trott.

“That places us in the top bracket of what are referred to as offshore finance centers – and ahead of so-called onshore centers such as Luxembourg and Dublin.”

Trott said it was a reflection of the island’s mix of talent, independence and natural assets and maturing financial services industry, and also a reflection of an important and increasingly recognized link to the City of London.

The recently published Foot Review into British Offshore Financial Centers showed that in Q2 2009, UK banks received more than USD330bn from Guernsey, Jersey and the Isle of Man. In 2008 – the year of the financial crisis – the level of net financing provided from Guernsey to the City was around 40% higher on average than just two years before.

Trott said that the independent verification of this figure was helping to change perceptions of the island’s role in the international financial system and its relationship with the UK.

A former financial trader before he entered politics, Trott acts as an overseas ambassador for Guernsey in his role as Chief Minister.

This year he has made three visits to Brussels and also visited Washington, Mexico and China to promote the island and its financial services business. He highlighted the progress made with China during the address to the conference.

“We must conclude that the financial crisis has resulted in greater scrutiny of all financial centers – and there’s a growing gap between those at the top end, and the rest. That’s why we in Guernsey are committed to staying ahead of the pack,” Trott said.

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