Jersey Bank Depositors Compensation Board: Loan Agreement

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A decision made 15 December 2014:

Decision Reference: MD-TR-2014-0148
Decision Summary Title:	Loan Agreement: Jersey Bank Depositors Compensation Board		Date of Decision Summary:	10 December 2014
Decision Summary Author:	Director of Accounting Services		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Loan Agreement: Jersey Bank Depositors Compensation Board		Date of Written Report:	10 December 2014
Written Report Author:	Director of Accounting Services		Written Report : Public or Exempt?	Public
Subject: Loan Agreement: Jersey Bank Depositors Compensation Board (“the Board”).
Decision(s): The Treasury and Resources Minister approved the Loan Agreement (attached as SD1) and three associated Security Interest Agreements (attached as SD2-4) (collectively “the Agreements”) on behalf of the States of Jersey.
Reason(s) for Decision: In order for the Board to be able to pay compensation quickly to depositors, the States agreed in P84/2009 that provision should be made for the States to lend liquidity funding from the Strategic Reserve to the Board in the unlikely event of a Jersey bank failure. Existing versions of the Agreements provide the legal framework for such lending and were signed on 13 January 2011. As a result of the new Security Interests (Jersey) Law, and changes proposed to the Banking Business (Depositors Compensation) (Jersey) Regulations 2009 (the “Regulations”) it is now an appropriate time for the States of Jersey to sign updated Agreements.
Resource Implications: The total financial amount that can be called upon from the States is unchanged by the updating of the agreements. The States of Jersey have clearer rights in relation to when they can recall the loan following the revised Loan Agreement, and in relation to their security interests under the drafting of new Security Interests documentation under the new Security Interests (Jersey) Law 2012. Accordingly there are no staffing implications and the financial implications for the States of Jersey should be beneficial as a result of updating the Agreements.
Action required: The Treasury and Resources Minister is to sign the Agreements on behalf of the States of Jersey.
Signature:		Position: Senator A.J.H. Maclean, Minister for Treasury and Resources
Date Signed:		Date of Decision: