Jersey bank watchdog to ramp up on-site visits

By James Molony

ST HELIER, Jersey (Reuters) - Jersey is preparing to beef up financial regulation as off-shore havens face up to greater scrutiny, the island's banking watchdog told Reuters.

The crown dependency is ready to increase visits to firms by a quarter and to implement harsher rules on the financial sector, should international regulation require that, the Jersey Financial Services Commission told Reuters.

Such new rules might be for hedge funds or special purpose vehicles banks use to create complex derivatives.

"I'm trying to increase on-site supervision so the visibility of the supervisor is going up," Director General John Harris told Reuters in an interview.

"We're increasing resources this year to try and ensure we've got much more coverage than we've had in the past, from 197 hopefully we'll get to 250 (visits)".

An island off the French coast often used by a cosmopolitan mix of non-residents for its favourable tax regime, Jersey's 47 banks are the main engine of its economy, providing its population of around 90,000 with per-capita income that is higher than in the United States.

Renewed pressure has come to bear on off-shore centres as the fallout from the credit crisis sends governments running to close tax loopholes.

A U.S. tax fraud probe into UBS AG (UBSN.VX) (UBS.N), the world's largest wealth manager, has shown Washington is serious about chasing tax dodgers, and in Europe, Britain has joined Germany and France in the battle against tax havens and has put the item on the agenda of a G20 meeting on April 2.