Abstract
Purpose – The global financial turmoil of 2008 spilled over into the British Isles offshore jurisdictions of Guernsey and the Isle of Man resulting in the collapse of two local subsidiaries of major Icelandic banking groups and consequent depositors' losses. The purpose of this paper is to contrast the sharply differing reactions of the insular authorities and critically evaluate Guernsey's recently enacted deposit protection scheme.Design/methodology/approach – The paper outlines the nature of the Guernsey jurisdiction, its offshore development and policy issues in deposit protection. Legislation establishing Guernsey's deposit protection scheme is described and critically evaluated.Findings – Guernsey's scheme is a rushed legislative reaction dominated by finance centre reputational concerns. The legislation is clear and comprehensive but the long‐term robustness of its funding model is unclear.Originality/value – The analysis contained in this paper highlights the ramifications of international bank in...
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