Monday, October 12, 2009

Birds of a feather flock together on the Isle of Man

Research on secrecy jurisdictions [findings here] has shown that the Isle of Man is one of 60 international secrecy jurisdictions with a defined transparency score of only 17%.

Recently the Isle of Man & Oxford University hosted a conference of financial personnel from 24 of the world's smallest nations. The Isle of Man was upholding itself as 'top of the form' hence well qualified to come to the front of the class to lecture & tutor the rest of the boys & girls on good financial governance. Guess what? 11 of these countries were in the list of 60 secrecy jurisdictions, and they made up 48% of the total of 24 attending the conference.

The small nations in the list of secrecy jurisdictions attending were:
Antigua & Barbuda, Barbados, Belize, Cook Islands, Maldives, Marshall Islands, Mauritius, St Kitts and Nevis, St Lucia, St Vincent & Grenadines, & Vanuatu.

Does that not sound rather like chums in the finance business meeting together to share notes on how best to make money out of operating as offshore finance centres? Is it not rather a case of 'birds of a feather flocking together?'

I found no evidence that any of the 24 small nations could hang their heads in shame by matching the record of the IoM's 3 failed banks, & no record that any of them had lost the savings of over 10,000 depositors during the previous 12 months.

John Aspden, Chief of the FSC, said last week that the loss suffered by Kaupthing bank depositors had nothing to do with wrongdoing on the Isle of Man. Who is he kidding? How arrogantly proud he stood to lecture on the jurisprudence of financial regulation on the Isle of Man, whilst thousands of depositors still waited to be paid compensation for his failure to vouchsafe their savings.

John Aspden's days are numbered.


  1. Let's hope his days are numbered.
    I am still waiting to be paid on 14/10/09 despite my forms being received by the DCS on 24/6/09. What a shambles!

  2. The collapse of KSF(IOM) was due to its parent bank still advising branch staff to 'carry on as normal' taking deposits whilst keeping them in the dark over the financial situation.

    The UK govt were advised of issues with the icelandic banking system in April of 2008 and this also came to light in the news so if you kept your money in the icelandic banks then that's your own risk.

    Finally you talk about the transparency score of 17% etc on the report for the Isle of Man. You appear to neglect the fact that the report was compiled in December 2008 and since then we are on the OECD white list and have signed many tax agreements with other countries.

    Also the secrecy jurisdictions website you constantly refer to could have been created by anyone - its hardly an official source if information.

    The warning signs over icelandic banks were there, and KSF were offering very high interest rates compared to other competitors - you state that

    "You was able to cancel your deposit cheque (your life savings) just minutes before the bank had its licence withdrawn by the IoM Financial Supervision Commission"

    In other words you were rate chasing a very high interest rates looking to make a big profit on your life savings.

    The risk were your own, the warning signs were there and you still wanted to 'cash-in', blaming the Isle of Man isn't correct especially as depositors are going to get their money back as part fo the Compensation Scheme.

    Get your facts straight before pointing the finger of blame.....

  3. Sir,

    para 1... the directors & FSC knew, so you are alleging that bank staff were kept in the dark for the sole purpose of continuing to take deposits when the bosses knew that the situation was bad with the parent bank? That is a serious accusation to make, & if it is true then it is your duty as a responsible, law-abiding citizen to make your evidence known to the police.

    para 2... as an expat I trust that an offshore bank that has my money is looking after it under the supervision of the regulator who is there to do that job on my behalf. I now know that Aspden now expects depositors themselves to do their own 'due dilligence', but offshore banks will not tell me what I want to know, only what they want me to know! That's why I will never trust an offshore bank with my money.

    para 3... the 'white list' is just a start, but presently is no guarantee as the OECD admits itself. Getting onto the 'white list' is the first hurdle jurisdictions had to jump through, and there are a number of higher hurdles coming up that the IoM will have to get over if it is to remain on it.

    papa 4... you can be assured that it is bona fide & has official recognition.

    para 5... KSFIoM advised me that it was offering 1% more than some other banks because it had no sub prime, was solvent & highly regulated by the FSC.

    para 6-7... a prudent saver looks for the best place to maximise a return on his savings; banks trade on offering the best rate in return for having your money. Nothing immoral in that!

    para 8... only depositors with up to £50k will get their money back under the DCS. Those with over £50k will have to wait up to 6 years for the bank's assets to be recovered. What they then get will be minus the costs of liquidation, presently estimated to be in excess of £30,000,000. From the experience of the previous 2 banks going bust on the IoM, & from the wider experience of liquidations, depositors may only get back half of what they have lost (including loss of interest & loss due to inflation).

    All European governments except the IoM guaranteed 100% all savings on deposit in their banks in the financial tsunami of 2008. The IoM has absolutely no credibility as an affshore deposit taker unless it can do the same. It has a moral & financial imperative to do so.

    I have my facts right at my finger tips & they all point to the guilty parties. They know that I know that they know they are to blame!