Jun 08 – GSD Raises Concerns Regarding Savings Bank
The Opposition has called for the Gibraltar Savings Bank to stop issuing debentures and the Financial Secretary to take advice from the Attorney General.
The GSD claims that the Chief Minister Fabian Picardo, as Minster for Public Finance, continues to avoid the question as to why he has invested 70% or £700 million of the Gibraltar Savings Bank’s assets into Government debt and Government companies.
GSD spokesman Roy Clinton said: “It is completely unprecedented for the Savings Bank to invest in Government owned companies in the way it has and it is a self-evident truth that without access to the money in the Savings Bank the Government would have had to borrow this money itself. This makes a mockery of the upcoming budget session as the true picture of the state of Gibraltar’s public finances is distorted without considering the GBP 449 million diverted into Government companies.
“The Government repeatedly makes the point that the Savings Bank is not a ‘bank’ but a Special Fund and then goes on to argue that this justifies it being able to make investment decisions in a less prudent fashion than a regulated bank ! The opposite should be true, the Government as custodian of public money held in a ‘Special Fund’ should be operating to a higher standard as envisaged by the Public Finance (Audit and Control) Act and should certainly not be investing in itself.”
Mr Clinton adds: “The GSD urges the Financial Secretary to seek advice from the Attorney General as to whether the manner in which the assets of the “Savings Bank Special Fund” are being invested in government companies and debt is within the spirit of the Public Finance (Audit and Control) Act. In addition we consider that the Director of the Savings Bank should stop issuing new debentures to the general public until the Attorney General has given his legal opinion to the Financial Secretary.
“This is a serious matter concerning us all, and if the only comment forthcoming from the Chief Minister as Minister for Public Finance is his ill-timed political speech at the opening of the GIB we have to doubt his competence to hold that office.
“The Gibraltar Savings Bank was created 133 years ago in order to encourage saving by the public and not to raise money for a spendthrift Government.”
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