ANOTHER follow-up letter to the Manx Herald

  • Lucky Jim
  • 13/10/08 31/05/09
  • not a depositor
  • Offline
Posted: Thu, 12/02/2009 - 15:43

In response to misleading comments by respondent & a Poll set up by the Manx Herald I have written another letter as follows:

Paul Martin, with respect you have got it wrong. Kaupthing was one of a consortium of Nordic Banks & Kaupthing IOM operated as an independent bank under the licencing & statutory regulation of the IOM. Being part of a consortium it's depositors had a parental guarantee by Kaupthing hf. That guarantee was cancelled by the Icelandic Government nationalising Kaupthing hf & absolving it of its obligation to honour its guarantee.

Unfortuntely the Poll is rather misleading because it suggests that the IOM taxpayer should bail out depositors. Depositors don't want or ask for this. A large chunk of the Bank's assets are frozen in the UK. All the IOM Government need do is to swollow its false pride & eat humble pie by asking the UK Treasury either to release the assets forthwith or ask for a sovereign bridging loan until the loan can be repaid from the banks assets recovered through receivership.

Unfortunately the Island's Chief Minister does not have the political clout to challenge HM Government. He was told by a member of the UK Treasury Select Committee that the IOM Government had a case against the UK FSA but Tony Brown doesn't have the bottle to take legal action to see that justice is done. The people of the Island would make him a saint if he did!

What could happen now is that the IOM Government could be sued by depositors and the IOM taxpayer will have to pay the huge costs which will be awarded to them. Those costs will include not only loss of interest but the enormous distress & ill-health that this whole debacle has brought about.

A cost-benefit anaylysis by any bright sparks in the IOM Treasury will conclude that obtaining a loan to get this dreadful situation out of the way is the best solution so that the Island can restore its now seriously flawed reputation as a safe & trustworthy off-shore financial centre.

The Kaupthing affair is a major crisis, and the IOM Government had better wake up fast to the Armageddon that will soon descend on it.

Sincerely, Jim

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