Tuesday, August 11, 2009

You can't bank on the Isle of Man to protect your money

The UK Prime Minister has stated unequivocally that it was HM Government’s policy that all governments should vouchsafe savings and deposits. This has been accepted by the g20 nations & has now been endoresed by every jurisdiction throughout Europe except the Isle of Man. Why not ?

As a small Crown Dependency the Isle of Man should be compliant with the policy, but it does not have the wherewithal to embrace it as it has no bank of last resort.

However, the Isle of Man is required to be compliant with international agreements entered into by HM Government, & if necessary the Government could legislate to enforce compliance. But the Ministry of Justice does not recognise the injustice of the situation as it affects thousands of expat British taxpayers who had no option but to bank offshore because of UK anti-terrorsim legislation. Instead it ducks the issue by stating that the IoM is an independent jurisdiction which has chosen to deal with the KSFIoM debacle through its depositors' compensation scheme.

Nothwithstanding the position of the Ministry of Justice (supported by HM Treasury), the UK Treasury Select Committeee recommended that the two governments should get together to find a resolution to the Kaupthing problem. There is no evidence that this has happened. Why not?

The Isle of Man should not be selling itself as a secure offshore financial centre as it does not have the financial infrastructure to cope with a banking crisis. Instead it allows its Financial Supervision Commission to state that it is not responsible if a bank fails, and that it is the responsibility of depositors to accept that a deposit carries a risk in much the same way as does an investment, & that prospective depositors should satisfy themselves that their money is safe in the trust of an IoM bank.

This is absurd! What then is the point of having a Financial Supervision Commission? What is the point of a bank if ones money isn't safe in its trust? KSFIoM was considered by depositors as guaranteed SAFE, that is why many expats felt confident in putting on temporary deposit, for example, the proceeds of the sale of a house pending their return to the UK.

The Isle of Man is NOT a secure place on which to deposit one's life savings. Until the government can guarantee that it is the message is clear: DON'T BANK ON THE ISLE OF MAN as it could seriously damage your wealth. See video: http://bit.ly/NBiwC


  1. You say Kaupthing bank was considered safe for someone to deposit a sum of money well in excess of the ceiling of compensation. I would like to know on what basis a depositor could reasonably conclude that Kaupthing was a safe bank to deposit say £100,000 ?


  2. 1. the bank claimed to be one of 5 strong Nordic banks
    2. it had no sub-prime exposure
    3. it was AAA credit rated
    4. it had a parental guarantee from Kaupthing hf
    5. it was a subscriber to the statutory depositors compensation scheme
    6. it was well regulted by the IoM Financial Supervision Commission
    7. within a week of it going bust it guaranteed in writing all savings irrespective of the amount deposited

    I believe that would be sufficient assurance to a prospective depositor that Kaupthing was a safe bank in which to put ones savings.

  3. If KSF IoM was not "safe" why the IoM allow it to trade? Yet again the IoM proves it is not fit to provide post office style banking yet alone international banking. The regulators knew exactly what was going on, and let it be.

    Still, I reckon in a year or two the rock will be well hammered, should be some cheap property about - maybe your house Manxcat?
    Better sell up now as the island WILL crash, see how it feels now.