The spotlight is certainly on offshore centres at the moment with talk from newly elected President Obama about closing down tax havens, which has been quickly echoed by other world leaders such as Gordon Brown who perhaps sees an opportunity to divert attention from the poor economic situation in his own country.
So what does this mean for Guernsey?
"Bring it on" seems to be the upbeat reaction from the local financial community on the grounds that Guernsey already has higher levels of regulation than most onshore jurisdictions.
As far as transparency goes, Guernsey has 10 Tax Information and Exchange Agreements in place with various countries, including the United Kingdom and the USA. Given this, it will be interesting to see on what grounds the so called well regulated jurisdictions, who incidentally have been responsible for the mess we are in now, have to place pressure on well regulated jurisdictions, such as Guernsey once all the hype and spin has evaporated.
In the meantime, Guernsey has not been unaffected by the credit crunch and there has been a slow but steady trickle of redundancies and companies reorganising their operations to become more streamlined and more efficient. Perhaps this is no bad thing as estimates prior to the recent crisis put the number of vacancies in the financial services industry as high as 800. Many firms are enjoying the opportunity to fill vacant positions.
On the positive side, banking deposits for 2008 rose by almost 3% to a figure of £157 billion, which shows that it's not all doom and gloom. To put this in perspective, however, an increase in the Sterling reporting figure for the final quarter of £20 billion masks an underlying drop in some of the currencies held, notably in US Dollars and Swiss Francs, whilst Euro and Sterling deposits actually rose.
Likewise, total investment funds under management and administration increased by 12.5% to reach £200 billion. Figures are not available in the fiduciary industry but anecdotal evidence would tend to suggest that this area has been little affected and the market and appetite for fiduciary services is still growing. In the meantime, it's worth putting in context that Guernsey's unemployment rate has just rocketed to 1%!
EIS and Seed EIS sectors
'Truly making a difference'
Avoidance, evasion and non-compliance
From 6 April 2019