Wednesday, November 11, 2009

More on UK offshore accounts

Emma Bergh-Apton, author Offshore Personal Savers-Dispelling the Myths, a report presented to the Treasury Select Committee in February, has been commenting on our recent blog, noting that:

"My current research so far reveals that the UK is the only country of the 95 polled thus far, which allows banks and building societies to refuse accounts to non-resident citizens in their home country
. . .
While high net worth individuals may prefer to keep their sterling offshore, it is hard to justify why the majority of we ordinary, hard working and retired Expatriates should be denied our right to open the account of our choice in our home country - particularly now that our funds are even more at risk if the Isle of Man, Guernsey, Jersey et al decide to limit their existing and, in the case of Jersey proposed, Deposit Compensation Schemes to 'resident protection only'."

Quoted in IFAonline last March, Bergh-Apton said that

"the 10,000 plus depositors in the two failed Icelandic bank subsidiaries would not be without the majority of their savings if crown dependency residents had no choice but to hold their savings offshore.
. . .
According to Bergh-Apton's survey of 57 banks and building societies based in the UK, only two small building societies were prepared to open accounts for UK citizens living in the crown dependencies and only upon personal application at the branch and subject to identity checks."

Britain's Financial Services Authority (FSA) has declined to challenge this situation, and has allowed a false rumour to circulate that this has something to do with money-laundering regulations. We know this isn't true: earlier this year Colin Powell, (then) chairman of the Jersey Financial Services Commission told us in an interview that there was no legal requirement for banks to force UK expatriate savers offshore, and a top UK anti money laundering official, who prefers to remain anonymous, also confirmed to TJN's director, John Christensen, that money laundering regulations have nothing to do with this.

No, it is British banks that are forcing savers to do this: as we have noted before, if the money is offshore the banks can use it to squeeze out all sorts of benefits such as increased leverage, tax advantages, easier capital requirements, and so on. As if they hadn't got enough support from taxpayers; they get a free ride from the regulators too! This scandal needs to be stopped by Britain's regulator. Once again, the FSA has been shown to be asleep at the wheel.


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