A year ago, I was writing my last financial stability contribution in the GFSC's annual report. Clearly unable to resist the allusion to Greenspan's autobiography, I commented then that I believed the recent past would be remembered as a short age of great uncertainty with little accompanying turbulence. I ventured that this would change during the year and made a forecast that turbulence would return to 'more normal' levels. The fourth quarter of 2018 more than confirmed this prediction.
Now at Guernsey Finance, I turn to thoughts of this year. Uncertainties have, if anything increased, not decreased. The IMF warns of a global downturn. Markets are stalked by protectionist fears. The US is poised for a second government shutdown. A Chinese slowdown looks irrefutable. The Fed places normalisation policy on hold and, absent any impact of a no deal Brexit, the Bank of England puts the odds of a UK recession as one in four by the summer.
Against a veritable tsunami of turbulence, I thought it would be informative in my new role directing financial services strategy, to turn to consideration of five facts about Guernsey's finance sector that have remained unchanged over the last year.
- Guernsey's stability should be added to the axiomatic certainties of death and taxes. It might sound like a cliche, but over the last year Guernsey has stood out as a rock of stability in world of change as UK Parliamentary events particularly have underlined Guernsey's political autonomy. First and foremost, for global investors security of assets is key, and whether it's driven by concerns with UK political risk, or macroeconomic factors, business has flowed in the last year as global clients recognise Guernsey as a haven from upheaval elsewhere.
- With Brexit little more than 36 days away, Guernsey's position as a source of continuity of market access is as it was a year ago. We're a third country today, we're a third country tomorrow, providing continuity of access to market to the UK and to the EU. With our private placement regime providing a proven, smarter, faster route to market into the EU, as confirmed by the European Commission in their own report less than 12 months ago, and the popularity of our placement route into the US, we are finding more and more global managers looking to consolidate their global distribution requirements through Guernsey.
- Our view that we will emerge through the EU and OECD substance reviews in 2019 stronger and more competitive, is as strong today as it was this time last year. Guernsey's commitment to global standards on tax transparency, through the Global Forum, and on substance with BEPS and the emerging global standards on substance requirements, is peerless. Our position as a global finance centre of substance is well recognised and respected, and we are seeing more and more evidence of substance becoming a key criterion of locational choice for global firms and their clients.
- The imperative for the world to pivot to green and sustainable finance remains as urgent today as it did 12 months ago. More than a year ago, Guernsey committed itself to a strategy to being at the forefront of sustainable and green finance. Since then, as a jurisdiction we have committed to strategic action to support sustainable finance, created a specific body – Guernsey Green Finance – to help us fulfil that commitment, and launched world-leading green finance product. We are seeing more and more global clients looking to jurisdictions like ourselves whose values and actions are aligned with their beliefs in a sustainable future.
- Our strategy remains as it was at a year ago. We are building on our strengths of stability, integrity, transparency and professionalism to grow our range of global specialism through innovation and leadership – built on strong fintech foundations to provide a safe, secure environment for the application of technology in financial services. Our pivot to family offices, private capital and wealth has been driven by market demands for the quality and professional service a specialist global finance centre such as ourselves provides. And to support that pivot we will continue to enhance our jurisdictional offer.
There are more certainties than these five. That itself is testament to the strength, specialism and substance of Guernsey's financial services sector. The difficulty with lists is what to leave out. But when I look back in another 12 months' time, I am sure that these five will still be key.
For more information about Guernsey's finance industry please visit www.weareguernsey.com.
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