Whilst Adam Smith probably did not have a small island in the English Channel in mind when he said this, he might have recognised the relevance of his words to a multi-billion pound economy (on many measures) that Jersey has become.
Jersey is a small but nearly perfectly formed financial market and the evidence of this is portrayed in the vast array of articles in this publication, covering virtually every aspect of finance from wealth management to money transmission. However, the one sector that is relied upon by all others, not quite ‘the one ring to control all others’ but one that does support all others, is banking.
The Jersey Bankers Association (JBA) represents a membership of 19 international banks with very significant breadth of geographic reach. Membership ranges from the very familiar high street names such as our UK clearing banks, private banks from Switzerland and beyond to major international banks from the US, Africa and the Middle East.
Together this very broad reach of expertise and interests ideally support the Jersey finance industry’s unique mix of business, from fund management, trusts, corporate services and capital markets, through to private and retail banking.
The size of balance sheet invested within Jersey banks, circa £152 billion, is a very significant investment by global head offices and oils the wheels of Jersey’s markets providing the liquidity, credit, funds, transmission and specialist structures that are needed. Banking of course also supports local businesses, the public of Jersey and not least the Government of Jersey.
Banks are very aware of their responsibility in the fight against money laundering and countering terrorist finance, acting as one of the key gateways in the movement of funds to and from Jersey. Hence the JBA continually work with Jersey Finance, the Jersey Financial Services Commission (JFSC) and the Government of Jersey, on improving the management of these risks.
The recently published Jersey National Risk Assessment was the culmination of a number of years work which was supported by many volunteers from the banking sector and has highlighted a range of ongoing risks that banks and others from the sector can work on.
Innovation and support for the Community has never been more relevant than 2020 with the onset of COVID-19. Working with Government a number of banks helped provide support services such as the Business Disruption Loan Guarantee scheme, they also provided direct support to business and individuals through additional credit and repayment forbearance on loans, mortgages and credit lines such as credit card repayments.
A consortium of Jersey banks also provided the Revolving Credit Facility of up to £500 million for the Government of Jersey. This was all achieved whilst activating contingency planning which saw over 95% of all the Jersey banking workforce, working from home.
The current pandemic makes it even harder than ever to predict the future. Globally, banks are finding it hard to create a positive economic value (i.e. make profits sufficient to reward shareholders for the risks they take in owning bank shares). However, the commitment to Jersey is there because the vibrant international financial services originated here help generate real earnings for banks. The benefits are therefore mutual and hopefully long lasting in achieving the vision of the aforementioned Mr Smith in the ‘judicious operations