Bank failure and deposit protection in offshore Britain: the case of Guernsey
Purpose – The global financial turmoil of 2008 spilled over into the British Isles offshore jurisdictions of Guernsey and the Isle of Man resulting in the collapse of two local subsidiaries of major Icelandic banking groups and consequent depositors' losses. The purpose of this paper is to contrast the sharply differing reactions of the insular authorities and critically evaluate Guernsey's recently enacted deposit protection scheme. Design/methodology/approach – The paper outlines the nature of the Guernsey jurisdiction, its offshore development and policy issues in deposit protection. Legislation establishing Guernsey's deposit protection scheme is described and critically evaluated. Findings – Guernsey's scheme is a rushed legislative reaction dominated by finance centre reputational concerns. The legislation is clear and comprehensive but the long-term robustness of its funding model is unclear. Originality/value – The analysis contained in this paper highlights the ramifications of international bank instability in small offshore jurisdictions and the regulatory problems this poses. Discussion of the legislative basis of the deposit protection scheme clarifies its nature and limitations as an investor protection technique, which is timely given the status of deposit protection as a key theme in the UK Government's initiated Foot Review of nine offshore jurisdictions.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 18 (2010)
Issue (Month): 3 (July)
|Contact details of provider:|| Web page: http://www.emeraldinsight.com|
|Order Information:|| Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK|
Web: http://emeraldgrouppublishing.com/products/journals/journals.htm?id=jfrc Email:
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Laeven, Luc, 2002. "International evidence on the value of deposit insurance," The Quarterly Review of Economics and Finance, Elsevier, vol. 42(4), pages 721-732.
- Ramin Cooper Maysami & Chris Sakellariou, 2008. "Financial liberalization, deposit insurance and bank stability," Applied Economics Letters, Taylor & Francis Journals, vol. 15(10), pages 743-747.
- Richard Dale, 2000. "Deposit Insurance in Theory and Practice," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
- David S. Hoelscher & Michael Taylor & Ulrich H. Klueh, 2006. "The Design and Implementation of Deposit Insurance Systems," IMF Occasional Papers 251, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:eme:jfrcpp:v:18:y:2010:i:3:p:272-292. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Louise Lister)
If references are entirely missing, you can add them using this form.