The Guernsey Financial Services Commission has signed a Memorandum of Understanding with the board of the Guernsey Banking Deposit Compensation Scheme (GBDCS).
The MoU provides a formal basis for co-operation, including for the exchange of information, and a framework for the working relationship between the Commission and the board, which are both independent bodies.
In particular, it establishes how the Commission and the board of the GBDCS will exchange certain specific information and in other respects work together to support the carrying out of each other’s statutory functions and responsibilities under the relevant legislation.
The GBDCS was formed in Guernsey in 2008 during the financial crisis as an important safeguard for Guernsey depositors. The scheme would manage applications from personal customers, sole trader businesses and certain local charities and issue payments up to £50,000 per depositor to support the local community in the event of a Guernsey licensed bank failure.
GFSC Director General William Mason said: “Noting the evolution of international standards in this area since the last MoU was signed nine years ago, the Commission and the Board of the GBDCS believe that the new MoU will help both organisations to continue to be able to perform their respective functions.
"Our ongoing co-operation, assistance and communication is very much in the interests of eligible depositors, banks, and the wider bailiwick.”
Chair of the independent Board of the Scheme Rick Denton said: "We are continually looking to improve how we manage the Guernsey Banking Deposit Compensation Scheme. This MoU helps clarify how the scheme would work with the Commission before and during the collapse of a local bank subsidiary or branch.
"Our scheme provides a vital local support mechanism and facilitates financial stability. A close working relationship with the Commission is vital to the Scheme’s efficient operation. We are grateful to William Mason, Jeremy Quick and their team for their work to create this improved co-operation."