m Sis vo On location - Guernsey O) St. Peter Port 10 special WHAT'S NEWS Issue 9 October 1997 Qj London A brief look at the names of many Guernsey Rabobankers and you'U probably piek up on a distinct French influence. The Channel Islands, or lies Anglo-Normandes as they are known on the other side of the channel, may have been British since 1204, but they have never relinquished their French heritage. The local language, although no longer widely spoken, is the French of medieval Normandy. And the local people, nicknamed 'donkeys' because of their proverbial stubbornness, have certainly clung to their mixed heritage. 'When you say we're British, that's not quite accurate,' explains director Andrew Courtney, 'because we have very special status. And we've had that status since around 1350. The English and the French were always fighting wars then and at some point the English started losing. The Channel Islands, which had been part of Normandy since the 1 lth century, got to choose whether they wanted to revert to SMUGGLING SUCCESS This special status was reconfirmed when the UK joined the then European Economie Community (now the EU) in 1971, a date that saw the Channel Islands take off as a financial and banking centre. 'We're a very entrepreneurial people,' Courtney laughs, 'if you go back into our history you'11 find a lot of buccaneers and smugglers as well as hard- working fisherfolk. More recently, we were very strong in horticulture, which is still important economically. Tourism is also a big earner for the islands. But beyond a doubt, the finance industry is crucial to our economy; it represents in excess of 55 percent of GNR' Yet the fact that this highly professionalized industry is so crucial for the island's economy is also a threat to future prosperity. KEEPING REPUTATIONS Guernsey has a peerless reputation as a bona fide Vanessa Loyd supporting the team. France or stay "English". Some incredibly shrewd donkey thought: Here's an opportunity for us. We'11 stay English, but in return we want to govern ourselves, set up our own laws and - here it starts to get very interesting for private bankers - our own tax system.' private banking and offshore centre, a reputation Guernseymen are eager to preserve. 'We are very, very careful to make sure nothing happens to upset that because reputation is hard to win and easy to lose these days,' says Courtney. Guernsey Paris Jersey POPULATION STRAINS But as already noted, the island's success is also a potential threat. 'That's right,' Courtney confirms. 'What you have to understand about Guernsey is that we do not have the mobility of labour you need in a highly professionalized and rapidly expanding industry. Add to that the fact that our residency laws restrict access to the island quite dramatically and you will understand our dilemma. There are only 60,000 people in the island - that includes our senior citizens, children, everybody. Our population has to remain stable because space is limited. Now, there are at least 78 banks here, between 30 and 40 accountancy firms, solicitors, and all of the other disciplines and specializations you need to run a solid financial sector. You will see our problem - at least the problem we will have in the next few years if we don't act.' PICKING UP PACE Any first year student of economics will teil you that when demand exceeds supply then prices rise. The greatest concern ensuing from such a limited labour pool is that through increases in costs the islands will price themselves out of the market. 'You can feel that the pace is picking up here,' he says, 'you see people moving from one bank to another for an additional GBP 1,000 a year. So we have to focus firmly on higher value- added business and make sure our people are equipped to provide first-class service to people who are prepared to pay for it.' Courtney admits training is a pet subject - 'it has to be on an island like this'. He is working closely with Vanessa Loyd to build a comprehensive training support program so that existing staff can continually grow skills and progress to more challenging positions. SINGLE CURRENCY As we talked, the island was gearing up for a seminar on the Euro and how Guernsey can seize opportunities a single currency in the rest of Europe could offer to the shrewd donkeys currently running the island. Concludes Ronald van Beek, who is not a Guernseyman by birth, but by adoption, 'if we play our cards right, the island's truly unique status in Europe means we could do something quite extraordinary in this respect.' Keep watching this space.

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