In his keynote address to the Labour Party Conference Gordon Brown said those very words: "Not one British saver lost a penny" in the financial tsunami that hit the UK in 2008. Excuse me Gordon but your speech writer had forgotten to put in the words: "except for the thousands of British expat savers who lost everything on the Isle of Man on 9 October 2008."
To compound this piece of being economical with the truth Gordon Brown went on to say: "every government across Europe chose to act", but he forgot to insert the damning words: "except the IoM government"
In response Lorraine, a dispossessed KSFIoM depositor,says:
- I am British
- I have always lived in Britain
- I was educated in Britain
- I have always worked in Britain
- I have always paid tax in Britain
- I deposited in KSFIOM on the advice of my British bank & British IFA
- I believed the British newspapers/Government/Regulatory Bodies that
the bank was safe
- I signed for withholding tax on this deposit
- I have lost my money by trusting Kaupthing IoM
Then Gordon Brown talked about 'putting morality into the market'. The PM needs first to put morality back into his government, the Treasury & the Ministry of Justice that has responsibility for the IoM as a Crown dependency.
What about Tony Brown? Is he going to do put morality into his government & the offshore fiancial institutions that keep the IoM economy alive? I guess not, but until he does those who were hoodwinked will go on telling the people of the world: "DON'T BANK ON THE ISLE OF MAN - it could ruin your wealth."
Wednesday, September 30, 2009
Saturday, September 26, 2009
The blind set out to lead the blind on the Isle of Man
Recently government officials from 24 small nations visited the Isle of Man as part of the Small Countries Financial Management Programme. Senior officials of central banks, finance ministries and regulatory bodies took part in a two-week executive education programme designed and run by Oxford University's Saïd Business School.
A number of Isle of Man experts took part in the education sessions including John Aspden, Financial Supervision Commission (FSC) chief executive, Sir Miles Walker, the Isle of Man's first chief minister, John Cashen, deputy chairman of the FSC and John Corlett QC, Attorney General.
Mr Cullen, who lectures at Oxford University's Saïd Business School and is a commissioner with the FSC, also took part in the educational sessions.
He said that having individuals with a wealth of knowledge and experience about the Isle of Man's development as an international financial centre was particularly interesting to delegates from developing nations.
So now we see the IoM setting itself up as an authority on how a small nation should best get its financial affairs, budget, banking regulation and compensation scheme in order. Extraordinary that this offshore centre that has a history of 3 failed banks on its hands, no bank of last resort, a seriously flawed depositor compensation scheme, & a Financial Supervision Commission that gave credibility to a worthless parental bank guarantee, should consider itself to be the best small nation to tell others how best to sort themselves out.
It is even more incredible that amongst those who lectured these delegates were the very people who were the architects of the downfall of Kaupthing IoM, one of the biggest cockups in banking history. Speaking with authority were Cashen (Director of the failed Kaupthing bank and Deputy of the FSC), and Aspden the chief of the FSC who backed him in his decision that brought down the bank.
Many look forward to seeing the full report of this expensive jamboree, but if such a report is published it is doubtful that it will be put in the public domain. Transparency on the IoM does not extend to that sort of publicity.
This event was one where figuratively the blind set out to lead the blind. The IoM refuses to do justice to thousands from around the world who lost their life savings on the Isle of Man, so it has no moral authority or credibility to lecture other small nations on how best to run their affairs.
Expats & others throughout the world are being warned: DON'T BANK ON THE ISLE OF MAN - there's now 3 pages of Google devoted to that topic & 30 videos on Youtube.com.
View here
A number of Isle of Man experts took part in the education sessions including John Aspden, Financial Supervision Commission (FSC) chief executive, Sir Miles Walker, the Isle of Man's first chief minister, John Cashen, deputy chairman of the FSC and John Corlett QC, Attorney General.
Mr Cullen, who lectures at Oxford University's Saïd Business School and is a commissioner with the FSC, also took part in the educational sessions.
He said that having individuals with a wealth of knowledge and experience about the Isle of Man's development as an international financial centre was particularly interesting to delegates from developing nations.
So now we see the IoM setting itself up as an authority on how a small nation should best get its financial affairs, budget, banking regulation and compensation scheme in order. Extraordinary that this offshore centre that has a history of 3 failed banks on its hands, no bank of last resort, a seriously flawed depositor compensation scheme, & a Financial Supervision Commission that gave credibility to a worthless parental bank guarantee, should consider itself to be the best small nation to tell others how best to sort themselves out.
It is even more incredible that amongst those who lectured these delegates were the very people who were the architects of the downfall of Kaupthing IoM, one of the biggest cockups in banking history. Speaking with authority were Cashen (Director of the failed Kaupthing bank and Deputy of the FSC), and Aspden the chief of the FSC who backed him in his decision that brought down the bank.
Many look forward to seeing the full report of this expensive jamboree, but if such a report is published it is doubtful that it will be put in the public domain. Transparency on the IoM does not extend to that sort of publicity.
This event was one where figuratively the blind set out to lead the blind. The IoM refuses to do justice to thousands from around the world who lost their life savings on the Isle of Man, so it has no moral authority or credibility to lecture other small nations on how best to run their affairs.
Expats & others throughout the world are being warned: DON'T BANK ON THE ISLE OF MAN - there's now 3 pages of Google devoted to that topic & 30 videos on Youtube.com.
View here
Tuesday, September 22, 2009
The skeletons in the IoM cupboard
The Chief of the Treasury says that the collapse of KSKioM was a "one-off".
It wasn’t.
In June 1982 the IoM Savings & Investment Bank (SIB) went into liquidation. Many of the 3000 depositors lost their life savings & their lives were ruined.
During the next 23 years there were countless legal actions to recover money lent out. Liquidators had to contend with broken pledges and bounced cheques, and spent years pursuing an allegation about millions of pounds of 'concealed' assets which led to them recovering just £225,000 from one of the bank's debtors. The paper chase took in the British Virgin Islands and Malta, among other locations.
After 23 years the liquidation was brought to a close after liquidators fees & court costs had soaked up most of the recovered assets. Depositors were left getting just 29p for every Pound they had deposited with the bank.
Then in 1991 another IoM bank went to the wall when the IoM Branch of Bank of Credit and Commerce International (BCCI) closed its doors. The depositors with BCCI were the first to receive any compensation through the IoM Depositors' Compensation Scheme. 10 years later the IoM government reported that depositors had received 60%.
An international financial accountant who has great experience in liquidation scenarios has offered the view that, though not familiar with the specific detail of the KSFIoM situation, over a six year period the total costs of the KSFIoM liquidation could be of such an order that depositors will be lucky to get 40%. This would be outrageous, and the depositors who have not received full compensation under the DCS will not rest until all that has been lost is fully restored to them.
That would be a 'worse scenario', but anything less than 70% net recovery in liquidation would be a bitter pill to have to swallow.
Certainly in terms of the worst scenario depositors are not going to sit around for 6 years to be then told that recovered net assets are 40% on account of the rest having been swollowed up in fees & other costs.
The Depositors' Action Group will step up its message: DON'T BANK ON THE ISLE OF MAN until justice is done by all deposits being restored 100% as they were in the UK & throughout Europe.
If the government choses to go on ignoring the dispossessed depositors just claim then it will be the skeleton of the Isle of Man itself that will end up in the cupboard.
It wasn’t.
In June 1982 the IoM Savings & Investment Bank (SIB) went into liquidation. Many of the 3000 depositors lost their life savings & their lives were ruined.
During the next 23 years there were countless legal actions to recover money lent out. Liquidators had to contend with broken pledges and bounced cheques, and spent years pursuing an allegation about millions of pounds of 'concealed' assets which led to them recovering just £225,000 from one of the bank's debtors. The paper chase took in the British Virgin Islands and Malta, among other locations.
After 23 years the liquidation was brought to a close after liquidators fees & court costs had soaked up most of the recovered assets. Depositors were left getting just 29p for every Pound they had deposited with the bank.
Then in 1991 another IoM bank went to the wall when the IoM Branch of Bank of Credit and Commerce International (BCCI) closed its doors. The depositors with BCCI were the first to receive any compensation through the IoM Depositors' Compensation Scheme. 10 years later the IoM government reported that depositors had received 60%.
An international financial accountant who has great experience in liquidation scenarios has offered the view that, though not familiar with the specific detail of the KSFIoM situation, over a six year period the total costs of the KSFIoM liquidation could be of such an order that depositors will be lucky to get 40%. This would be outrageous, and the depositors who have not received full compensation under the DCS will not rest until all that has been lost is fully restored to them.
That would be a 'worse scenario', but anything less than 70% net recovery in liquidation would be a bitter pill to have to swallow.
Certainly in terms of the worst scenario depositors are not going to sit around for 6 years to be then told that recovered net assets are 40% on account of the rest having been swollowed up in fees & other costs.
The Depositors' Action Group will step up its message: DON'T BANK ON THE ISLE OF MAN until justice is done by all deposits being restored 100% as they were in the UK & throughout Europe.
If the government choses to go on ignoring the dispossessed depositors just claim then it will be the skeleton of the Isle of Man itself that will end up in the cupboard.
Saturday, September 19, 2009
It's time to address moral failures in the Isle of Man
On 18 September Paul Myners, Financial Services Secretary, addressed the Financial Times Global Finance Forum on the topic: Developing a new financial architecture: lessons learned from the crisis
In it he said that the fundamental role of any country’s financial sector is to manage risk. "Risks have become increasingly complex, opaque and inter-linked; and it is now clear that the assessment and management of risk by financial institutions failed....But we also learned that that power of the financial system was not matched by responsibility for its actions, creating an accountability gap that has had to be filled by taxpayers across the globe."
That is what happened when the directors of KSFIoM transferred half the bank's liquid assets to KSFUK which were then lost in administration. The directors failed to exercise due diligence when confronted with the known risks of the Kaupthing hf scenario, and the inherent risks to which its sister banks were exposed on account of it. Today they still refuse to accept any responsibility for their crass decision. They refuse to give account - or offer an apology - to the depositors who lost everything through their action.
In advance of its own Select Committee of Inquiry the IoM government has been quick to pronounce the directors, and the FSC that supported them, innocent of any culpability. Blame is placed at the door of others in order that the directors & the FSC could be excused from being held accountable.
Mayners went on to say: "Corporate leaders in the global financial sector have begun to talk about addressing moral failures and that is to be welcomed... it is time to start hearing how they intend to drive moral reform within their institutions."
Now that is an interesting concept that seems to be beyond the current thinking of the IoM government, the FSC and the finance houses of this offshore financial centre. Any notion that they have a moral responsibility to uphold the trust that depositors placed in a bank on this island does not feature in the values they hold.
It is time that we started to hear how the IoM government intends to drive moral reform within itself & its institutions. Until it does people will not trust it. Until then the message to the people of the world is: DON'T BANK ON THE ISLE OF MAN as it is an offshore centre that has no moral integrity. It has no interest in people, only their money.
In it he said that the fundamental role of any country’s financial sector is to manage risk. "Risks have become increasingly complex, opaque and inter-linked; and it is now clear that the assessment and management of risk by financial institutions failed....But we also learned that that power of the financial system was not matched by responsibility for its actions, creating an accountability gap that has had to be filled by taxpayers across the globe."
That is what happened when the directors of KSFIoM transferred half the bank's liquid assets to KSFUK which were then lost in administration. The directors failed to exercise due diligence when confronted with the known risks of the Kaupthing hf scenario, and the inherent risks to which its sister banks were exposed on account of it. Today they still refuse to accept any responsibility for their crass decision. They refuse to give account - or offer an apology - to the depositors who lost everything through their action.
In advance of its own Select Committee of Inquiry the IoM government has been quick to pronounce the directors, and the FSC that supported them, innocent of any culpability. Blame is placed at the door of others in order that the directors & the FSC could be excused from being held accountable.
Mayners went on to say: "Corporate leaders in the global financial sector have begun to talk about addressing moral failures and that is to be welcomed... it is time to start hearing how they intend to drive moral reform within their institutions."
Now that is an interesting concept that seems to be beyond the current thinking of the IoM government, the FSC and the finance houses of this offshore financial centre. Any notion that they have a moral responsibility to uphold the trust that depositors placed in a bank on this island does not feature in the values they hold.
It is time that we started to hear how the IoM government intends to drive moral reform within itself & its institutions. Until it does people will not trust it. Until then the message to the people of the world is: DON'T BANK ON THE ISLE OF MAN as it is an offshore centre that has no moral integrity. It has no interest in people, only their money.
Friday, September 18, 2009
The Isle of Man can only offer a 'piggy bank' service up to £20k
I have accepted an anonymous comment to the post 'Depositing in the IoM could seriously damage your wealth'. I respond to it hereunder.
The IoM boasts itself as a world leader in the offshore financial market, having a triple AAA credit rating & a budget surplus that is required by statute. Nevertheless it does not have the financial infrastructure in the form of a bank of last resort or a corporate commitment by its banks to underwrite the liquidity of one of its members in the event of there being a run on it.
The IoM boasts having a strong regulatory framework underpinning the conduct of banking business on the island. The government says that KSFIOM was "a one-off" incident (though there were 2 previous 'one-offs'). That being the case the government & the banks should have great confidence in the stability of the banking sector to withstand the chill of a recession, and had there been a mechanism in place to cope with the sort of crisis that hit KSFIoM - a crisis that the FSC was party to & capable of handling rather than simply resorting to withdrawing the licence - KSFIoM might still be operating today. Certainly 11,000 people would not have lost everything on 9 October 2008.
It is not good enough to simply say that the IoM with a population of 80,000 can not have a bank of last resort. You can not have your cake & eat it. If the IoM is to be a leading trustworthy offshore financial centre then it has got to be able to offer depositors from around the world the assurance that their life savings are safe on the island. This is a Crown dependency & if necessary it should have the backing of the Bank of England, and preferably have its banks regulated by the UK.
Hitherto the IoM had no problem in allowing people with £50k ++ to deposit on the island. Now post KSFIoM there is a problem, & the seriously flawed compensation scheme will only cover deposits up to £20k from October 2009. On present form - unlike the UK FSCS - it will be up to 12 months before compensation is paid.
Depositing in the IoM is no longer the best option for anyone looking to deposit a substantial sum from the sale of a house, an inheritance or a life's accumulated savings designed for one's 'golden years'.
On its own admission from October the IoM can now only operate a 'piggy bank' deposit service up to £20k. That in itself is good enough reason why millions of people around the world would not consider depositing on the Isle of Man. There are at least 15 other reasons that readily come to mind for not doing so.
The IoM boasts itself as a world leader in the offshore financial market, having a triple AAA credit rating & a budget surplus that is required by statute. Nevertheless it does not have the financial infrastructure in the form of a bank of last resort or a corporate commitment by its banks to underwrite the liquidity of one of its members in the event of there being a run on it.
The IoM boasts having a strong regulatory framework underpinning the conduct of banking business on the island. The government says that KSFIOM was "a one-off" incident (though there were 2 previous 'one-offs'). That being the case the government & the banks should have great confidence in the stability of the banking sector to withstand the chill of a recession, and had there been a mechanism in place to cope with the sort of crisis that hit KSFIoM - a crisis that the FSC was party to & capable of handling rather than simply resorting to withdrawing the licence - KSFIoM might still be operating today. Certainly 11,000 people would not have lost everything on 9 October 2008.
It is not good enough to simply say that the IoM with a population of 80,000 can not have a bank of last resort. You can not have your cake & eat it. If the IoM is to be a leading trustworthy offshore financial centre then it has got to be able to offer depositors from around the world the assurance that their life savings are safe on the island. This is a Crown dependency & if necessary it should have the backing of the Bank of England, and preferably have its banks regulated by the UK.
Hitherto the IoM had no problem in allowing people with £50k ++ to deposit on the island. Now post KSFIoM there is a problem, & the seriously flawed compensation scheme will only cover deposits up to £20k from October 2009. On present form - unlike the UK FSCS - it will be up to 12 months before compensation is paid.
Depositing in the IoM is no longer the best option for anyone looking to deposit a substantial sum from the sale of a house, an inheritance or a life's accumulated savings designed for one's 'golden years'.
On its own admission from October the IoM can now only operate a 'piggy bank' deposit service up to £20k. That in itself is good enough reason why millions of people around the world would not consider depositing on the Isle of Man. There are at least 15 other reasons that readily come to mind for not doing so.
Tuesday, September 15, 2009
The IMF report is not a clean bill of health for the IoM
The IMF has just released its report on its team's visit to the Isle of Man in September 2008. The visit preceeded the collapse of the Kaupthing IoM bank so makes no reference to it.
Allen Bell, Treasury Minister, said way back last Autumn that the IMF report was imminent. Then why has it taken 12 months to report on what was a comparitively simple task undertaken way back last September? From reading the report it is self evident that it was deliberately delayed to take account of (1) the changes made by the IoM Financial Supervision Commission to the Banking Regulations & the Rule Book, (changes made as a direct consequence of the failure of KSFIoM), & (2) Basel II's review & update of its own protocol which was not completed until July 2009.
In other words the report was not comparing the IoM banking regulations of September 2008 with the Basel protocol at that time, but was reporting on the regulations relative to Basel II as they are today. Hence it is a report based on a 'stable cleaned & the door shut after the horse had bolted' after KSFIoM collapsed.
Invevitably Tony Brown, Chief Minister, puts a spin on the findings of the report, making it look as though the Isle of Man has a clean bill of health & is a safe place on which to deposit one's life savings. It isn't. The report only addresses the standard of banking regulation relative to the standards laid down by the Basel II protocol. That is a long way from saying that the IMF endorses the Isle of Man as a risk free place for depositing one's life savings.
Indeed the report says that the IoM is not risk free - that its banks rely heavily on their onshore banks if they get into trouble and that in itself is not a guarantee of security. It also considers the Depositors Compensation Scheme is unsound.
The plans for the Titanic had stamped all over them unsinkable, but it sank! The IoM is already holed by th collapse of KSFIoM and is sinking. The IoM can not borrow from the IMF but the IMF could offer the UK government a loan to enable the IoM government to meet the just demands of the Kaupthing depositors to have all their lost savings returned to them. Why doesn't it?
Best advice at the present time is: DON'T BANK ON THE ISLE OF MAN as there are significant risks involved in doing so.
IMF Report [PDF format]: here
Allen Bell, Treasury Minister, said way back last Autumn that the IMF report was imminent. Then why has it taken 12 months to report on what was a comparitively simple task undertaken way back last September? From reading the report it is self evident that it was deliberately delayed to take account of (1) the changes made by the IoM Financial Supervision Commission to the Banking Regulations & the Rule Book, (changes made as a direct consequence of the failure of KSFIoM), & (2) Basel II's review & update of its own protocol which was not completed until July 2009.
In other words the report was not comparing the IoM banking regulations of September 2008 with the Basel protocol at that time, but was reporting on the regulations relative to Basel II as they are today. Hence it is a report based on a 'stable cleaned & the door shut after the horse had bolted' after KSFIoM collapsed.
Invevitably Tony Brown, Chief Minister, puts a spin on the findings of the report, making it look as though the Isle of Man has a clean bill of health & is a safe place on which to deposit one's life savings. It isn't. The report only addresses the standard of banking regulation relative to the standards laid down by the Basel II protocol. That is a long way from saying that the IMF endorses the Isle of Man as a risk free place for depositing one's life savings.
Indeed the report says that the IoM is not risk free - that its banks rely heavily on their onshore banks if they get into trouble and that in itself is not a guarantee of security. It also considers the Depositors Compensation Scheme is unsound.
The plans for the Titanic had stamped all over them unsinkable, but it sank! The IoM is already holed by th collapse of KSFIoM and is sinking. The IoM can not borrow from the IMF but the IMF could offer the UK government a loan to enable the IoM government to meet the just demands of the Kaupthing depositors to have all their lost savings returned to them. Why doesn't it?
Best advice at the present time is: DON'T BANK ON THE ISLE OF MAN as there are significant risks involved in doing so.
IMF Report [PDF format]: here
Monday, September 14, 2009
Is Foot about to put the boot in for the Isle of Man?
Michael Foot is leading a UK government inquiry into the relationship beween the UK & its Crown dependencies. Shortly he will be setting out a number of options to government ministers in the report in the face of increasing concern in Whitehall over exactly what is going on with respect to Britain's Crown dependencies.
A number of British overseas territories are facing serious problems which could get worse. In the event of further economic deterioration, they could become failed states. Leaked information indicates that the government may need to make provision for the financial failure of British tax havens. The failure of a major tax haven could cost UK taxpayers billions of pounds.
The Isle of Man, Jersey, Guernsey are the UK's closest Crown dependencies. The 14 overseas jurisdictions that come under the Crown include Bermuda, the Cayman Islands, Gibraltar and the British Virgin Islands. Collectively these tax havens tie up trillions of dollars & Sterling, which constitute a strangle hold on the world's economy.
Together they drain the UK economy of an estimated £25bn annually through their role in aggressive tax avoidance and evasion involving a whole plethora of financial jiggerypokery to make millions of already ultra-wealthy people stinking rich whilst billions around the world starve.
The IoM government relies heavily on this financial 'trade' to maintain its budget in a state of surplus. It admits that the thousands of ordinary expats who deposit their life savings on the IoM are not tax dodgers and that their contribution to the economy is relatively insignificant. So the government puts out propaganda that it isn't concerned about the campaign of the dispossessed Kaupthing depositors: 'DON'T BANK ON THE ISLE OF MAN'. The banks themselves might have a very different view. So might the credit rating agencies, despite the fact that they are very much in the pocket of the IoM government.
So Foot may well be putting in a heavy boot when he reports on his findings in relation to the three-legged Isle of Man.
Here's a short video from the depositors' campaign on Youtube.com:- 'Dallas comes to Douglas'
A number of British overseas territories are facing serious problems which could get worse. In the event of further economic deterioration, they could become failed states. Leaked information indicates that the government may need to make provision for the financial failure of British tax havens. The failure of a major tax haven could cost UK taxpayers billions of pounds.
The Isle of Man, Jersey, Guernsey are the UK's closest Crown dependencies. The 14 overseas jurisdictions that come under the Crown include Bermuda, the Cayman Islands, Gibraltar and the British Virgin Islands. Collectively these tax havens tie up trillions of dollars & Sterling, which constitute a strangle hold on the world's economy.
Together they drain the UK economy of an estimated £25bn annually through their role in aggressive tax avoidance and evasion involving a whole plethora of financial jiggerypokery to make millions of already ultra-wealthy people stinking rich whilst billions around the world starve.
The IoM government relies heavily on this financial 'trade' to maintain its budget in a state of surplus. It admits that the thousands of ordinary expats who deposit their life savings on the IoM are not tax dodgers and that their contribution to the economy is relatively insignificant. So the government puts out propaganda that it isn't concerned about the campaign of the dispossessed Kaupthing depositors: 'DON'T BANK ON THE ISLE OF MAN'. The banks themselves might have a very different view. So might the credit rating agencies, despite the fact that they are very much in the pocket of the IoM government.
So Foot may well be putting in a heavy boot when he reports on his findings in relation to the three-legged Isle of Man.
Here's a short video from the depositors' campaign on Youtube.com:- 'Dallas comes to Douglas'
Sunday, September 13, 2009
Manx Alchemy - how the IoM turned gold into sand
Nixi, a dispossessed KSFIoM depositor, was lucky in the draw for a one hour slot on the 4th. plinth in Trafalgar Square, London. He was unlucky in so far that it was at the early hour of 7am! Nevertheless a large number of depositors from the UK, the IoM, France, Spain & Italy & Brazil joined him with banners advising people DON'T BANK ON THE ISLE OF MAN as to do so involved risks that could seriously ruin their wealth & damage their health.
To view click here
Nixi has also done a brilliant video Manx Alchemy posted on www.youtube.com where he sings how the Isle of Man turned gold into sand & ruined the lives of 10,000 depositors. To view click here
The depositors are telling the IoM government loud & clear that they are not going away until they have had every penny of their savings restored to them like those who lost everything in the UK & the rest of Europe when the banking crisis started to take its toll last autumn. They have the backing of a number of major international financial organisations in their fight for justice, including the Independent Financial Advisers online site.
To view click here
Nixi has also done a brilliant video Manx Alchemy posted on www.youtube.com where he sings how the Isle of Man turned gold into sand & ruined the lives of 10,000 depositors. To view click here
The depositors are telling the IoM government loud & clear that they are not going away until they have had every penny of their savings restored to them like those who lost everything in the UK & the rest of Europe when the banking crisis started to take its toll last autumn. They have the backing of a number of major international financial organisations in their fight for justice, including the Independent Financial Advisers online site.
Wednesday, September 9, 2009
Isle of Man continues to be scheming, deceitful, contemptuous & hypocritical
Depositors were told that payments under the compensation scheme or liquidation would be made 4th. September. Allen Bell, Treasury Minister, has told the media that everything was on target for a rapid repayment under the scheme of all deposits up to £50k, with those up to £201,613 receiving £50k under the scheme. Now the scheme manager is complaining that he has been inundated with mail; his staff can't cope so there is going to be delay in getting payments to all claimants under the DCS. Guess what? yes! he blames depositors!
This is a total disgrace. The scheme manager has failed to provide the communication that was promised between himself & the depositors. He has a dedicated website but doesn't know how to use it. What direct communication there has been with depositors has been insensitive & often incomprehensible. The scheme manager seems to be totally blind to the terrible stress that he is creating. He might well have problems but he isn't suffering the terrible deprivation that the depositors have been enduring, & their desperate desire to get something of their money back after 11 months of sheer hell.
This incredible beurocratic shambles just reinforces the perception made in this blog back on 11 June that the Isle of Man continues to be scheming, deceitful, contemptuous & hypocritical.
If anyone had any doubts hitherto about the wisdom of depositing offshore here, the answer is clear: DONT BANK ON THE ISLE OF MAN as it could seriously damage your wealth and ruin your health at the same time.
This is a total disgrace. The scheme manager has failed to provide the communication that was promised between himself & the depositors. He has a dedicated website but doesn't know how to use it. What direct communication there has been with depositors has been insensitive & often incomprehensible. The scheme manager seems to be totally blind to the terrible stress that he is creating. He might well have problems but he isn't suffering the terrible deprivation that the depositors have been enduring, & their desperate desire to get something of their money back after 11 months of sheer hell.
This incredible beurocratic shambles just reinforces the perception made in this blog back on 11 June that the Isle of Man continues to be scheming, deceitful, contemptuous & hypocritical.
If anyone had any doubts hitherto about the wisdom of depositing offshore here, the answer is clear: DONT BANK ON THE ISLE OF MAN as it could seriously damage your wealth and ruin your health at the same time.
Sunday, September 6, 2009
Depositing on the Isle of Man could seriously damage your wealth
John Aspden, Chief of the IoM Financial Supervision Commission, counsels that anyone depositing in the IoM is taking a risk in much the same way as if their deposit were an investment. His advice now is not to put more than £50,000 in any one bank on the IoM. Why not? The government is constantly trumpeting about how good is its financial services industry, and how well placed it is to ride the waves caused by the international banking crisis and the recession. if it is so good why suggest that it is risky to deposit more than £50k on the island?
If it is rash to place more than £50k in an IoM bank then why did Mr.Aspden sanction the directors of KSFIoM putting £532million of the bank's assets into one bank, especially knowing that the bank in question (Kaupthing UK) was one of the riskiest of banks to put the lifeblood of KSFIoM? The predictable event of Kaupthing UK going into administration cut of the flow of blood to the very heart of KSFIoM causing a massive heart attack. There was no life support machine in the form of a bank of last resort to resuscitate the patient.
Offshore centres are suddenly finding themselves with their backs to the wall. If the Cayman Isles - the Caribbean 'daddy' of them all - is in dire straights what hope is there for the Isle of Man? The island has nothing like the 3 trillion dollars that Cayman has in its finance houses.
Best advice is not to put any money on deposit on the Isle of Man as it could seriously damage your wealth.
If it is rash to place more than £50k in an IoM bank then why did Mr.Aspden sanction the directors of KSFIoM putting £532million of the bank's assets into one bank, especially knowing that the bank in question (Kaupthing UK) was one of the riskiest of banks to put the lifeblood of KSFIoM? The predictable event of Kaupthing UK going into administration cut of the flow of blood to the very heart of KSFIoM causing a massive heart attack. There was no life support machine in the form of a bank of last resort to resuscitate the patient.
Offshore centres are suddenly finding themselves with their backs to the wall. If the Cayman Isles - the Caribbean 'daddy' of them all - is in dire straights what hope is there for the Isle of Man? The island has nothing like the 3 trillion dollars that Cayman has in its finance houses.
Best advice is not to put any money on deposit on the Isle of Man as it could seriously damage your wealth.
Thursday, September 3, 2009
The primary reasons for the failure of Kaupthing IoM
It doesn't really need a Tynwald Select Committee to inquire into the reasons for the collapse of the Kaupthing bank. There was no member of staff shouting through the closed door on 8 October 2008: "we have stopped trading but no one knows why".
The bank had its licence withdrawn by the Financial Supervision Commission, the same body that had backed the transfer of over half of the bank's assets to Kaupthing UK which went into receivership in October 2008. Having lost these assets Kaupthing IoM ceased to have liquidity to continue trading.
The IoM government has already announced that neither the directors nor the FSC did anything wrong. Then why have not the directors made a statement to the depositors who lost all when the bank went bust? And why did the FSC seek & obtain for itself immunity from prosecution?
The directors were able to transfer the assets because the IoM banking regulations permitted such a transfer to a bank within the same banking group. In normal & stable circumstances this could have been determined to be an appropriate decision. However, neither the circumstances nor the reasons were normal.
The money had been upstreamed to the parent bank Kaupthing hf (Iceland) which both the FSC & the UK Financial Services Authority knew for some time was a bank in trouble. For this reason it was decided that the money would be more secure if transferred to Kaupthing UK.
Common sense alone would have told the directors & the FSC that to put over half the assets entirely unprotected into a sister bank of a failing parent was asking for trouble. There was an umbilical cord between the two and if the 'mother' bank went down it would invevitably take down the offspring. It did. Every Kaupthing bank in Europe went bellyup.
So whilst the transfer of the assets were not made contrary to the IoM banking regulations, the decision to do what was done was clearly a failure of the exercise of due diligence required in banking practice to ensure that this was the right decision having regard not only to the specific context of the looming Kaupthing hf crisis, but also to the context of the interntional financial crisis that had already errupted.
It will not be sufficient for the Select Committee to simply pronounce: "there was no regulatory failure". The directors made a decision, backed by the FSC, to transfer the assets to KSFUK and the committee must decide whether that decision was one made with due dilligence having regard to the context in which it was made.
The bank had its licence withdrawn by the Financial Supervision Commission, the same body that had backed the transfer of over half of the bank's assets to Kaupthing UK which went into receivership in October 2008. Having lost these assets Kaupthing IoM ceased to have liquidity to continue trading.
The IoM government has already announced that neither the directors nor the FSC did anything wrong. Then why have not the directors made a statement to the depositors who lost all when the bank went bust? And why did the FSC seek & obtain for itself immunity from prosecution?
The directors were able to transfer the assets because the IoM banking regulations permitted such a transfer to a bank within the same banking group. In normal & stable circumstances this could have been determined to be an appropriate decision. However, neither the circumstances nor the reasons were normal.
The money had been upstreamed to the parent bank Kaupthing hf (Iceland) which both the FSC & the UK Financial Services Authority knew for some time was a bank in trouble. For this reason it was decided that the money would be more secure if transferred to Kaupthing UK.
Common sense alone would have told the directors & the FSC that to put over half the assets entirely unprotected into a sister bank of a failing parent was asking for trouble. There was an umbilical cord between the two and if the 'mother' bank went down it would invevitably take down the offspring. It did. Every Kaupthing bank in Europe went bellyup.
So whilst the transfer of the assets were not made contrary to the IoM banking regulations, the decision to do what was done was clearly a failure of the exercise of due diligence required in banking practice to ensure that this was the right decision having regard not only to the specific context of the looming Kaupthing hf crisis, but also to the context of the interntional financial crisis that had already errupted.
It will not be sufficient for the Select Committee to simply pronounce: "there was no regulatory failure". The directors made a decision, backed by the FSC, to transfer the assets to KSFUK and the committee must decide whether that decision was one made with due dilligence having regard to the context in which it was made.
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