LOCAL BANK WAR THREAT

G20 SUMMIT COULD POSE A SERIOUS THREAT TO ROCK's ECONOMIC FUTURE 

 As the world's heavyweight economies look for scapegoats for the global financial crisis whose roots lie in the greed of the big international banks and governments' failure to regulate them adequately, the so-called "tax havens" are already being lined up as targets for blame. Britain's premier Gordon Brown who, as former Chancellor of the Exchequer must shoulder some of the blame for Britain's current economic woes, has already laid the foundations for a full-scale attack when the G20 leaders meet next month, by blurring the boundaries of the legal practise of "tax avoidance" and illegal "tax evasion".

His aims are obvious - make both methods of dodging the tax man's clutches illegal and, not only will Western revenue coffers benefit, but the subsequent upheaval across off-shore "financial service" jurisdictions (such as the Channel Islands, Lichtenstein, the Isle of Man,` the Caymans and Gibraltar) will provide a distraction  and provide the appearance of action to reverse the crisis.

Tax havens the target

With real reason, the world's big banks have already become the target of public global anger. And some of the "tax havens" such as Antigua (where the activities of the notorious cricket enthusiast Thomas Stanford threaten the island's entire economy) and the Caymans probably are culpable of the financial jiggerey-pokery of which they stand accused.

There are also likely to be well-grounded reasons for the international pressures which have forced the promise of a new banking openness from secretive Switzerland.

But Gibraltar - and other small financially focused jurisdictions - have complied with all the tough regulatory demands of  the IMF and the European Union...and, because we adopt the high standards of Britain's financial regime, our legislation often sets the bar higher than anything required of EU members.

But in the current climate, as the world trembles on the knife edge between Recession and Depression, there is a real danger that our track record will be ignored when the G20 members meet. There is a very real risk that we will be bundled onto the ‘black list' proposed by Brown and other leaders which is designed to tighten the screw on tax havens. It is a threat which Chief Minister Peter Caruana appears to have ignored as he walks like the nursery figure "Johnny Head in Air" towards the financial abyss and assures us that Gibraltar will emerge unscathed from the world's financial crisis.

If we are included on that threatened black list of tax avoidance/evasion havens the exodus of investment will be far more damaging than anything we have experienced in our three centuries of British rule.

Against this background, the fall-out from the prospect of a local bank "war" - rumours of which are doing the rounds but which have been dismissed by local Barclays chief Franco Cassar -  could lead to further damage.

Cheque delays denied

Barclays and NatWest were delaying the exchange of each other's local cheques in a tit-for-tat clash, a local lawyer claimed this week. The delays - of at least five days -  had jeopardised two major business transactions, and his staff had been told by NatWest that the bank was delaying the handling of local Barclays Bank cheques in retaliation to similar moves by Barclays.

"Utter nonsense," Franco Cassar told VOX. "I don't believe that NatWest would behave that way and we certainly would not. (Not unusually, Kerry Blight, the local head of RBS/NatWest was not available to comment.)

In all likelihood the delays are caused by the antiquated method of handling cheques between the Rock's banks - in which, easch weekday morning, representatives of the four active retail banks meet in the boardroom of the Chamber of Commerce and hand over each others' cheques in an arcane performance that resembles a group of card players in a game of "Beggar my Neighbour". But that does not make the rumours any less dangerous.

In the current winds of crisis our local banking industry must keep on an even keel...whatever the sins of their principals in the UK or the "Johnny Head in Air" approach of the Chief Minister.