IoMG incompetence

Posted 07/09/2009 - 14:33 by thesunnysouth

Casting my mind back to the dreadful days of mid October 2008 we were all advised that the collapse of KSF IoM was the fault of the UK FSA and the decision (FSC initiated or otherwise) to deposit £503 in the sister bank KSF UK.
we were told that the FSC and the IoMG were pouring over the figures to find a solution. They employed Alix partners et al at great expense to provide a solution. However with half the funds tied up in the administration of KSF UK, all hands were tied.
My strap line is incompetence. we were told more than half the assets were tied up in the UK. However I note that PwC in the latest figures show a figure somewhere in the mid £300m being asked for and that a third of that is set off. In addition Ernst & Young have provided £40m as a dividend representing 20% of the claim. Even my rudimentary maths suggests that the amount of money generally agreed to be in and owed by the UK bank is £200m. Now again using some basic facts and perhaps the FSC would say using there professional knowledge it could have been expexted that the UK bank would find 50% suggesting a possible loss of £100m.
If the IoMG had the bottle to step in during October and guaranteed the bank it would have, over time, perhaps cost them £100m. Compare that to the hit to their reputation and the probable loss anyway under DCS and it would have been a small price to pay.
As a governemnt that prides itself on financial management i still cannot work ouit how £200m was misinterpreted as £503m and why it has taken 11 months for the issue to be recognised. I can only think it was incompetence.

The continuing level of trust in the competence of the IoMG

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