Thursday, February 18, 2010

The 'perfect storm' is looming for the Isle of Man

As a tiny island the IoM is being tossed like a small rudderless ship in international political & financial stormy waters. As such it has little control on the direction of its future destiny. It will be blown hither & thither as its crew seek to keep it afloat in the face of huge waves breaking over its deck.

Allen Bell, Treasury Minister, has just introduced a 'reactive' budget that reflects the present state of the storm & what he considers necessary to keep the ship afloat. At the same time he acknowledges that "THE WORLD HAS CHANGED". He expresses the blind hope that whatever is thrown at the IoM in the future it will always land on its feet.

However,the ship is seriously holed below the waterline. This is summed up well by Tax Research UK HERE .

The reality is that presently the backbone of the IoM economy is its financial services industry. The figures published today by the IoM Financial Supervision Commission [HERE] show a further decline in deposits & investments. Sterling bank deposits are down by nearly 3 billion, & funds under management are down by 3.3 billion.

Allen Bell attributes this to low interest rates in the international banking arena (notwithstanding the IoM banks offer attractive & competitive interest rates), but this is not the whole picture. He dare not publicly acknowledge the impact of the campaign 'DON'T BANK ON THE ISLE OF MAN' which warns British expats & others HERE of the risks involved in putting their life savings in this offshore jurisdiction. Over 11,000,000 have Googled don't/dont bank on the isle of man, a topic wich now extends to 3 pages on Google.

The reality is the Isle of Man is no longer viewed by millions of potential depositors as an offshore centre on which they would want to trust their savings.

It is only a matter of time now that the financial services industry will cease to be viable on the Isle of Man. The 'perfect storm' is looming to overwhelm this small island ship.