Banks in abundance but are they safe?: the question of compensation for depositors in the event of a bank going bust has come to the top of many investors' agendas following the Barings debacle

Article Abstract:

Many offshore banks actively seek private investors and the traditional target market comprises expatriates and other international investors. Advantages of an offshore bank deposit account including interest which is credited without tax deduction meaning an investor will benefit from a tax deferral period. Many investors are concerned about compensation if a bank collapses and some authorities operate compulsory compensation schemes. The financial regulators in Guernsey and Jersey believe that a compensation scheme would be superfluous as their screening of banks is extremely rigorous.

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Banking on a clean record

Article Abstract:

Guernsey has seen a successful development of its banking industry. Deposit takers total 72 in 1995 compared with 45 in the mid 1980s. Total deposits have risen to 43 billion pounds sterling in 1995 from 5.8 billion pounds in 1994. The major four UK banks operate in Guernsey, as do banks from Switzerland, France, Spain, Japan, Turkey, the Netherlands, Germany and Bermuda. There is no compensation scheme, but regulators argue that this is not needed due to the high level of scrutiny of banks operating in Guernsey.

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Bank accounts in any currency you like: multi-currency accounts permit easy currency switching at competitive interest rates and the ability to hold balances in a multitude of currencies. An minimum opening balances are not prohibitive

Article Abstract:

The multi-currency facilities provided by some banks in the Channel Islands and the Isle of Man mean that account holders can write cheques in many different currencies, using only one cheque book. Some banks do not require a minimum deposit or withdrawal. Features of such accounts include free cheques, direct debits, stnading orders, currencyc switching and money market levels of interest.

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