The Isle of Man’s future as an international finance centre and the ability of its banking sector to survive continual scrutiny were the main topics of a panel discussion held at the Villa Marina, organised jointly by the Institute of Financial Services (IFS) Isle of Man Centre and the Isle of Man Bankers’ Association.
Chaired by past IFS president Dougie Elliott of Alexander Elliott, the panel comprised director of Isle of Man Finance John Spellman, HSBC area manager Mike Hennessey, Dickinson Cruickshank partner Nick Verardi and chief executive of the Department of Trade and Industry Chris Corlett, each of whom offered a personal perspective on the Island’s status – now and in the future - as a leading international finance centre.
In the face of the current global banking crisis HSBC’s Mike Hennessey urged the audience ‘not to underestimate bankers’ capabilities’, adding that the collapse Kaupthing, Singer & Friedlander was not a reflection on the calibre of the bank’s local workforce or on how the Isle of Man conducted its banking business.
Clients were attracted to the Island, he said, not least because of its recent inclusion on the OECD’s white list of countries meeting international standards on taxation.
Diversification across all sectors of the economy was fundamental to the Island’s future prosperity and he praised the efforts of the Isle of Man government for ‘working very hard behind the scenes to move the Island forward.’
Changing attitudes towards the Island’s reputation as an international finance sector were commented on by Dickinson Cruickshank’s Nick Verardi. ‘The Island has come a long way since being viewed with suspicion in the 1980s,’ he said, adding that by 2000 the Island was being ‘attacked from everywhere’ and more recently had been the subject of much rhetoric, not only from President Obama ‘banging his drum’ but also from President Sarkozy.
The favourable outcome of the G20 summit had provided the Isle of Man with an opportunity to refute such criticism.
‘We’ve only just begun but we have a long way to go,’ he said, adding that diversification would be the Island’s salvation. He believed that in 10 years’ time there would be no more than a dozen international finance centres, the Isle of Man being one of the survivors. ‘The future’s still bright, but we’ve a lot of work to do.’
For Isle of Man Finance director John Spellman G20 was ‘a process, not an end in itself’. He said: ‘The Isle of Man doesn’t operate in splendid isolation,’ adding that the attraction of ‘zero tax was never going to be enough’ to guarantee the Island’s survival. More crucial was the opening up of new business opportunities and he cited the Island’s recent signing of a double taxation agreement with Estonia as ‘massively important’, and called for the development of a robust consumer protection strategy.
He envisaged there would be a very different financial services sector in five years’ time, one that would be marketing solutions rather than products.
‘Zero tax as a marketing tool is dead’ said the DTI’s Chris Corlett. What was important to help secure the Island’s economic survival was ‘To show you’re a good international citizen. The Isle of Man can and must become an international business centre.’
He said that financial services would need to work in concert with all other sectors of the economy and recognise that the Island’s customer profile was changing, from UK to globally-focused. Clients today, he said, were seeking ‘a breadth and depth of expertise.’
Of particular concern to Mr Corlett was ‘leakage’, where companies, although choosing to set their operations up in the Isle of Man, were sending much of their banking and insurance business off-Island. To stem the leak he said the Island would need to develop ‘an holistic offering’.
There followed a lively question and answer session, during which the issues of upskilling and recruiting high-calibre ‘superstars’ were highlighted, the importance of celebrating the Island’s successes emphasised, and general agreement expressed on the Isle of Man’s role needing to change from international finance centre to international business centre in order to secure the Island’s long-term survival.
Pictured: Director of Isle of Man Finance John Spellman, Dougie Elliott of Alexander Elliott, Dickinson Cruickshank partner Nick Verardi and chief executive of the Department of Trade and Industry Chris Corlett.
