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There is a need but the pathway won’t be an easy one

26 Aug, 2016

Highly regarded financial commentator Horace Camp gave his thoughts on the Finance for Guernsey investigations in his recent Guernsey Press column. With thanks to Horace and the Press.

‘I don’t know how many shopping days there are to Christmas but the recent headline about a locally owned high street bank made me think of it straight away. Every Christmas I go out of my way to watch Frank Capra’s masterful film It’s a Wonderful Life. For those of you unfamiliar with it I suggest you waste no time in tracking it down but for the purposes of this article all you need to know is that it features a Savings and Loan operation which has provided the finance for the local community to achieve its dreams.

Island resident Geoff Miller who is floating the idea of a “Bank of Guernsey” is no Jimmy Stewart and if you aren’t familiar with Mr Stewart ask your Mum and Dad about him. In the film Stewart plays the good as gold hero who has sacrificed his own dreams to keep the Savings and Loans going and as a result keeping the inhabitants of Bedford Falls prosperous and out of the slums of the evil capitalist landlord.

Mr Miller is probably not as altruistic in his aims but nonetheless if his concept can inject the same type of hope into Guernsey Plc as Bailey Savings and Loan did for Bedford Falls then we must investigate further.

There are I am sure plenty of potential depositors locally who are seeking some sort of return on cash deposits just as I’m certain there are locals willing to borrow at reasonable commercial rates.

Pensioners are seeing virtually no return on cash deposits and first time buyers saving for homes are not seeing their deposits grow from interest payments. Lenders are becoming more difficult to find here because their requirements are based on English property and banking laws. Only recently we amended our access to property law to enable ticks to be made on foreign head office generated Mortgage Application forms.

A local Savings and Loans type bank run for the common good could put these two groups together and without the margin being diluted by profit depositors could receive a fairer return than they are seeing.

The States of Guernsey could get involved in such an institution as a tool for several of its social and economic policies. Affordable funding for homes, increased income for pensioners and support for diversification of local industries. A States backed Savings and Loan could even be a source of borrowing for our commercial entities where the interest payments stay on Island for our benefit.

The rub is that no one wants a bank here that could fail. The first social media comment I saw was suggesting LesLandesbanki as the name of the new institution. The Icelandic collapse is not forgotten and many will need to be won over here even if the proposal is convincing.

To Mr Miller I say again keep on investigating because there is a need but don’t think the pathway to success is going to be an easy one.’

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