Am I missing something, why doesent the IOM governmant commence compesation now

  • thaichris
  • 02/11/08 31/05/09
  • a depositor
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Posted: Fri, 28/11/2008 - 21:44

This my first post

Something that is slightly confusing to me.

It is a fact that KSF failed hence the IOM government should commence to compensate the depositors for their limit of 50K now without further delay.

If for whatever reason there is a solution whereby the depositors get all or part of their funds back then this compensation can be deducted from the person who recieved it.

I dont think getting this compensation can hurt our efforts to get full return of our funds and may assist by putting pressure on the IOM government.

If the IOM government further delay their payouts will they be giving lost interest also.

Isent a bird in the hand work two in the bush

Comments welcome

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IoM Compensation...

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
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  • Sat, 29/11/2008 - 09:14

KSFIoM is in limbo; it is not officially in liquidation, which is the normal 'trigger' for the DCS to come into play. Unfortunately, there is no money in the IoM DCS so its not as though a cheque will pop through your letterbox for £50K. Because IoM banks didn't want to play ball with the IoM Govt over increasing the DCS limit, the Treasury have had to step in and offer up to £150M of IoM taxpayers money to help subsidise the payouts, but even this for a limited period. There may be a way to get some intitial payments out to hardship cases on the approval of the Tynwald, this is pending. We are between a rock and a hard place I'm afraid.
Ice


Agree with the 'bird in the hand'

  • frog
  • 10/10/08 13/09/09
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  • Sat, 29/11/2008 - 16:39

But the 'hardship fund' is not likely to be anything like that. What it will have to be is a payout of the £150M pledged by the IOM government to the classes of depositors that they choose to pay. It can't be done on a hardship basis because it would be too costly to set up a 'means test' and take too long. It will have to be done for all members of the classes of depositors they decide on. This will likely be not dissimilar to the UK government;'s funding of the FSCS to pay KSFUK's retail depositors (but obviously not in full in this case). This would make the FSC a creditor of KSFIOM to the amount they pay out (we'll probably have to sign a form migrating our claim for the amount paid to us over to the FSC).

What I suspect the IOM Government is wrestling with (if what I suggest is the way it happens) is if it is a fixed payment to the depositors up to the balance of their accounts, then all of these depositors will effectively get 100% of that portion of their deposits.

The other option is to use the £100M+ of cash in KSFUK and pay that out equally to all depositors. I wonder if this can be done legally and also it will not help the bond holders at all as their accounts are all rolled up into one account with the bond issuer. If they separated it, then the other depositors could claim unfair treatment.

Tricky one!


Payment on Account

  • Ally
  • 13/10/08 31/05/09
  • unspecified
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  • Sat, 29/11/2008 - 16:52

It was stated in Court that any interim payout would be a "payment on account" and made to all account holders.

It was also stated in court the funds for this would come from

1) Monies already recovered by PWC

or

2) The £150m made available to the DCS

or

3) "Other funds"

Personally I think it will out of 1 or 2.


Thanks

  • frog
  • 10/10/08 13/09/09
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  • Sat, 29/11/2008 - 16:56

Yes, thought I saw it somewhere! In that case, my comments stand for 1 & 2. Option 3 is nice and mysterious...

BTW, I was using FSC when I really meant DCS as you rightly point out.


Need to sort this

  • dclf1947
  • 10/10/08 31/08/09
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  • Sat, 29/11/2008 - 11:42

I think the period for the 50K is one year. I think that we should push the IOM government now for this time limit to taken away completely in case the worst comes to the worst.


Iom compensation scheme..

  • sad
  • 10/10/08 31/10/09
  • a depositor
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  • Sat, 29/11/2008 - 12:01

indeed....i called the brittania IoM ( hoping to find a place for my cash back from KSF IoM!) and asked about their gauantee.... i was told it was the same as any UK bank. Great i said, what if the brittania UK failed.......silence... then, i was told the IoM compensation scheme would apply..... 50K for the next year and then 'prob' back down to 15K.......all beware, the 50k compensation is not for ever on the Iom!!


Limited Period??

  • Ormus
  • 19/10/08 31/05/09
  • unspecified
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  • Sat, 29/11/2008 - 11:18

IceCrusher - what exactly do you mean by "Limited period"? Do you mean that this offer of £150m will end at some date, and if by that date nothing has been resolved, then we lose even that? In effect going back to the original guaranteed compensation of £15k?


Re: Limited Period

  • Ally
  • 13/10/08 31/05/09
  • unspecified
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  • Sat, 29/11/2008 - 13:34

The DCS limit has been raised to £50k for 12 months. That means if any bank fails within that 12 month period depositors will be entitled to £50k. After 12 months the limit will revert to £15k. So that means if a bank were to fail in March 2010 the compensation limit would be £15k

In the case of KSFIoM as of yet there has been no default event as the bank has still not gone in to liquidation. When / if that happens as long as it happens by 8th October 2009 the compensation limit will be £50k


£50,000 limited to 1year

  • Anonymous
  • Offline
  • Sat, 29/11/2008 - 16:25

According to the following DCS website the £50,000 Compensation is limited to 1 year as stated in the above postings but unlike that stated above the document claims that if a Participant defaults after 23rd October2009then the maximum compensation for all depositors will be £20,000. The following is an extract from the website shown below.

"It should be noted that under the current scheme on 23rd October 2009 the maximum
level of compensation will reduce to £20,000 for ALL depositors. In other words, if the
DCS is activated in the first 12 months of the Regulations, the higher sum for individuals
will apply irrespective of whether it may in reality take more than these 12 months in
which to fully pay out this higher sum. If a Participant defaults after 23rd October 2009
then the maximum compensation for all depositors will be £20,000."

http://www.gov.im/lib/docs/fsc//guidancedcs.pdf


1 year limit

  • Ally
  • 13/10/08 31/05/09
  • unspecified
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  • Sat, 29/11/2008 - 16:48

undone

You are right. I had £15k in my mind as that was the limit up to October of this year. The limit was 75% up to a maximum of £20k so in effect a maximum of £15k compensation.