Blair-Blog: Iceland's Theft - The Good News

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Posted: Fri, 17/10/2008 - 22:20

Iceland’s Death Ground Decision

Recent indications are that Iceland will reject overtures from its national pension funds to acquire a 51% interest in Kaupthing hf. And why wouldn’t they? It’s easier to transfer the assets to a new entity – "New Kaupthing" – and draw a red line through the bank’s international deposit and bond books.

This latest move by Iceland is nothing more than the end-game in an international game of bluff-calling that began when the G7 central banks and Europe in particular rejected Iceland’s call for assistance some days ago. Iceland: “Hey, when we told you we were near bankruptcy and needed urgent help, we really weren’t kidding!”

Iceland’s actions thereafter have been quite predictable and wholly consistent in their desperation. Its first move having been rebuffed by the G7 (read NATO) is to raise the stakes by talking to Russia. As much as I’m sure this was a genuine effort to raise foreign reserves, it is also Iceland’s desperate attempt to gain negotiating leverage (and not a very subtle one). Its second move? Grab bank assets to gain through nationalization what you couldn’t gain through diplomacy.

But what do you call it when a sovereign nation nationalizes three large banks, transfers the bank’s assets to new entities to fund domestic deposits and defaults on the foreign obligations? Answer: Theft. Very large scale, $60 billion-sized theft.

And I submit that if you were in Iceland’s shoes, you’d do exactly the same thing. These guys are bankrupt and are heading for the Stone Age if something isn’t done. Scooping the assets out of these banks was the only way of replenishing foreign reserves to pay for foreign imports and, quite literally, put food on the table. That’s what you do when the international community puts you on what Sun Tzu call’s “death ground”. No choice. It’s not a lot different from the guy with 6 kids deciding not to pay his outsized credit card bills. He knows he’s bankrupt and he knows he has nothing to lose. Visa can wait – you feed the kids.

So What Happens Now?

Iceland has done an excellent job of successfully gaining leverage in its bargaining with the IMF, the G7 and NATO. I believe those negotiations will continue and there will be terms agreed. If not with the IMF, then Russia. You chose. But I figure NATO will have something to say on the matter.

The one thing that absolutely will not happen (in my humble opinion) is UK follow-through on a lawsuit with Iceland. This is empty rhetoric. Why? Because everyone knows that if you obtain a legal judgment against a bankrupt defendant, it isn’t worth the paper it is written on. Especially if that defendant is a sovereign nation – it does tend to make judgment enforcement and collection rather tricky to say the least. Iceland knows this. The UK knows this. And Iceland knows that the UK knows this. Sure, Gordon Brown can bluster all he wants – it’s good for opinion polls – but at the end of the day, it’s going nowhere.

The Moral Dilemma

When the dust settles and cooler heads prevail, the bigger question for Kaupthing depositors, and the global community in general, is whether the IMF or the G7 can bailout Iceland or continue to trade with Iceland if part of the deal does not first involve compensation of its banks’ international creditors. If it doesn’t, it would be tantamount to condoning the theft of bank assets to support a bankrupt economy. Wouldn’t it? I just don’t see this happening – even the IMF can’t be that dumb. And there is the good news.

Blair

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Sleepless

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  • Sat, 25/10/2008 - 03:37

I do hope that you are right Blair.
Just now I feel a terrible tiredness ( nights of no sleep) and as Consuelo said so apptly i now exist in a parallel universe where I wake when i do sleep and find the nightmare is real.


If the pen..

  • David9J
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  • Fri, 24/10/2008 - 15:31

..really is mightier than the sword (or if the keyboard is mightier in this case), then the battle is as good as over. Blair, you have a great turn of phrase and I really enjoy reading your posts. When this is all over and we have all put our returned funds safely in the Channel Islands (ahem) I hope you will find another cause to champion so that we can continue to get our daily dose of your wit and wisdom. Thanks. David


Thanks David9j

  • 491
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  • Sat, 25/10/2008 - 00:44

Thanks for the nice comment. I'm not sure about wit or wisdom, but I do know it's all pure speculation. If I do end up getting a big cheque, I'm still not sure what I will do, but I'm happy to continue to correspond with my fellow depositors! If I DON'T get a big cheque, I was seriously thinking about moving to Iceland - since they have all my money anyway. I'd swan around all day like their great benefactor: "Hi. Hello there. Are you enjoying that beer? Oh good - you're very welcome!"


Help me out Blair

  • Consuelo
  • 13/10/08 31/05/09
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  • Fri, 24/10/2008 - 10:05

Blair please help me get this straight as I am getting beffudled after 2 weeks in this strange parallel universe in which I find myself

Is the Treaury asking Iceland for 3billion odd quid that it has already transferred to Ing on behalf of UK Icesave investors plus whatever is decided it owes Isle Of Man plus tyhe 100 million lost by Landsbanki investors in Jersey and are Holland and Germany doing the same on behalf of their privste savers in Kaupthing and Landsbanki?

No wonder talks are getting nowhere. this is surely simply impossible.


IceSave

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  • Fri, 24/10/2008 - 19:53

The £3bn for ING was Heritable Bank and Kaupthing Edge only, and they'd be looking first to get some or all of that back from the liquidations.

The IceSave repayments went direct to the depositors, are are on top of all those other banks - the only place that money is going to come from is Iceland, who are legally bound to pay at least the first £16,000 per depositor.

But as has been said, even IceSave alone is a huge amount of money per head for the Icelanders.

As for Iceland ring-fencing all the domestic parts of each bank, well that's pretty much how US law would automatically handle a US bank in the same situation. Worse even - US assets can only be used for the benefit of US depositors, but the US liquidator can also make a grab for foreign assets!

The UK and the Isle of Man treat all unsecured creditors of the company equally, wherever in the world they happen to live; using all assets they can get, from wherever in the world they reside.


I'm Starting a New Country - Who's In?

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  • Fri, 24/10/2008 - 21:08

Ouch! Sucks to be a foreign investor in an American bank! So it's good then - that we are not invested in one. Thank goodness the Brits have a keener sense of fair play for international creditors! Hopefully the IMF feel the same way; comments from UK Treasury seem to indicate so. We'll see I guess.

I confess I don't really know the rules on this stuff. It just seems inconceivable to me that Iceland's "strategy" will work. Otherwise, I'll just start a new country. Raise a shoot load of money overseas. Buy all kinds of cool toys for my citizenry. Then default like a banshee, and go to the IMF cap in hand. I'm not pissed with Iceland mind you, because I don't think this was there intention - still?

I'd love to have some history on how foreign creditors were handled in past IMF interventions. Any idea?


History

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  • Fri, 24/10/2008 - 21:33

I'm not sure there's anything comparable. When the IMF bailed out Britain in 1976, there wasn't any problem with the banks, just the economy in general. That seems to have been the general rule with the usual Third World countries that have to go to the IMF for help.

This is a pretty unique combination of failures of private limited liability companies, nationalised by the state, which has then itself got very close to national bankruptcy.

The IMF imposes the conditions that it's members effectively vote for it to impose (hence the US getting the changes it wanted in UK government policies during the 1976 crisis). US has 17% of the vote, UK 5%, and the other European countries about 20% between them.

P.S. You'd still need to convince the IMF to give your new country membership!


Treasury & IMF Gambit

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  • Fri, 24/10/2008 - 11:02

Consuelo. Good question. And I'm as beffudled as you most of the time. But here is what I think the Treasury are saying - and its the title theme of this entire thread:
"Hey Iceland, we understand you are in a desperate pickle, but you can't just "nationalize" three banks, suck up all the assets for yourself, then leave all the foreign liabilities in defunct shell banks - especially if you are gonna ask for foreign aid from us and a G7 institution that we help fund!"
And I also think they are saying this:
"Ok, Iceland, here's the frickin deal: We'll lend you some big time dosh so you can make all these reparations to UK savers - yes that's right - we will lend you money so you can give it back to our UK retail depositors and repay the loan over a very loooonnnng period of time. Everybody wins and you guys go back to being a 2nd world fishing village - instead of the Stone Age. Can't say fairer than that can we?"
And the IMF are saying to Haarde:
"Hold on old cock, we can't just refloat your entire economy if you are gonna rip off most European countries in the process. So square things with those nice folks in the UK and then we'll talk. Cut all the deals you have to, then show us the final tab and we'll see what we can do."
Which ever way you slice it, Iceland has to own this international debt - especially after the aggressive form of nationalization it pursued. Perhaps if it had just let the banks fail, it could have hid behind limited liability. "Not our problem", but then all of its domestic depositors would have been royally %#!$#@%^ up the ying yang big time - and they would have had to go to the IMF anyways. All roads led to the IMF. The path they took just gave them a bit more control IMHO.
But the scale is the problem is the thing. Although I believe IMF will probably step up, I see a few things as likely conditions: 1) creditors being treated equally as a condition, 2) possibly some % of liabilities being agreed, 3) some pain for Iceland, 4) IMF eventually writing off their loan as a bad debt. Why, cos 300,000 people into $62 billion = $200,000 for every man woman and child. And that, like you say, is "simply impossible". Blair


bblair if you remember when a

  • expat
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  • Fri, 24/10/2008 - 20:07

bblair if you remember when a little group of us started to talk all those years ago that was pretty much what we said then, we are now at the stage of plausible deniablity as i've said a few times today, in all we say and do we need to give d & b a way out so they don't lose face, we need to push for iceland to satnd p, but to get that itasabout those behind thee scenes negotiations

lets remember there is a comedy of errors of judgement here, from loose tlak which caused a run and poor actions and judgement by the fsa and fsc, that is the achilles heel of the UK. heads will roll i do not doubt, but for now they need to rescue face all around before this is over and life carries on, again we did surmise the imf would not act until all blod was extracted by all sides now didn't we, it just seems like a lot of time for us, a giant step for us is a small step for them in the context of things,
thanks gotta go more visitors!!!!
postm i hope you approve of our actions to get the set aside today, we let others do the work! its cheaoer that way!


Saving Face...

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  • Fri, 24/10/2008 - 22:57

Yes Expat. I could not agree with you more. These guys need (and I think are looking for) a way out of this mess. I really do believe it to be a comedy of errors as you say.
I TOTALLY approve of your actions to get the windup set aside - are you kidding? - that was awesome! Doesn't matter who made the courtroom speeches - you guys kept it on the agenda! Thank you. Blair


IMF gambit...

  • IceCrusher
  • 14/10/08 25/10/11
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  • Fri, 24/10/2008 - 12:40

good analysis blair


Manx Government

  • Done like a Kipper
  • 10/10/08 n/a (free)
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  • Fri, 24/10/2008 - 07:13

Is anyone aware if the IOM Government has lobbied the IMF directly to hold off on any bale out of Iceland until it has agreed to guarantee KSFIOM depositors' losses?


IMF Lobby NOW!

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  • Fri, 24/10/2008 - 09:00

Kipper - Not sure, but WE should! Here below is the letter I sent to IMF on Tuesday - please circulate. Also, I think the key thing is to ask IoM govt for their assurance that the UK Treasury has requested the IMF to attach IOM conditions - not just UK condition - to any loan package. It's foreign affairs duty! Blair

Link to IMF: http://www.imf.org/external/np/exr/contacts/contacts.aspx

Dear Sir / Madame,

I am a depositor in the Isle of Man subsidiary of the Icelandic bank called Kaupthing hf. I am also a member of the KSF(IoM) Action Group - a group of depositors who have been financially ruined by Kaupthing's recent demise.

It is my understanding that the IMF is currently negotiating a loan package with the government of Iceland to help stabilize its financial system, strengthen its currency and provide for adequate foreign currency reserves. First let me say that I applaud this initiative and wish only the speediest recovery for the Icelandic economy.

However, as you may know, a consequence of Iceland's collapse is that its three major banks have failed - its foreign subsidiaries ringfenced or taken into administration outside of Iceland and the parent banks have been nationalized. The approach to these nationalizations has given great cause for concern among each banks' international depositors and creditors. In general it appears that the banks assets and operations have been absorbed by "new" entities and these new banks are failing to honor the obligations of the old banks which are now defaulting on foreign bonds, deposits and deposit guarantees. To be sure, I don't have all the details of this process, but I believe it is fair to describe Iceland's approach to nationalization as extremely aggressive and quite unfair.

As much as I and, I am sure, my fellow depositors wish only the very best for Iceland's future financial well-being, I think it is only fair to ask that the IMF attach conditions to its financial aid package that provide for the satisfaction of its international obligations.

Can you please provide me with some assurance that Iceland's aggressive nationalization efforts and the resulting injury to foreign depositors and creditors will not be condoned by the IMF's unconditional support in this regard? Many of my fellow depositors have lost their entire life savings and are financially ruined - please tell me that the IMF is not expecting these individuals to be sacrificed while Iceland is restored to financial health.

I look forward to your kind attention to this matter.

Sincerely,

[BLAIR]


BRAIN GONE TO MUSH

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  • Fri, 24/10/2008 - 12:16

bblair

I will also send your letter everywhere and please can you advise on which email address is the right one to send stuff to the IMF i took one look at the site and my brain turned to mush.

thank you


Treasury Hints at "Other Creditors" Being Paid

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  • Fri, 24/10/2008 - 06:28

Times Online:
http://business.timesonline.co.uk/tol/business/economics/article5004002.ece

IMF STRINGS

I've posted at top that I could never imagine the IMF bailing out Iceland without compensation of international creditors. One thing to just give them money - like Ethiopia - but not so easily done after they have just gutted their three largest banks and raised the draw-bridge. Yesterday the IMF suspended loan negotiations pending a resolution of the loan negotiations with the UK. Iceland PM Haarde: “The IMF would like to see those matters solved before any further steps are taken,”

TWO CAN PLAY THAT GAME

The UK Treasury can play that game too. If the Treasury knows that the IMF is in this moral bind - and has known for sometime. So it has enabled them to negotiate slowly with Iceland and play hard ball on the terms of the UK loan. Petur Bloendal, chairman of the Icelandic Parliament’s tax and economic affairs committee, told reporters yesterday that he did not believe that Icelandic MPs would approve the proposals for a British loan. He said that British and Dutch demands over Icesave accounts in the two countries amounted to the equivalent for every Icelander of three to four times the reparations that were imposed on Germany after the First World War.

And so it goes... around and around. The IMF will give them money if they "settle" with their creditors. The Treasury are not likely to settle for less than par because they know that Iceland can't get its IMF loan until they agree to par.

UK TREASURY HINTS AT "OTHER CREDITORS"

And the one ray of light in all of this came from a UK Treasury spokesman who confirmed not only the logic of IMF loans being contingent on paying debts, but also hinted that just maybe the UK wasn't the only creditor. Treasury spokesman: “Any agreement with the IMF is always dependent on countries honouring their debts and treating creditors equally. The UK is not the only country involved in this process and other creditors will also expect payment." (Yeah, no sh*t Sherlock).

[WHISPERING] Translation, I think that is the UK honoring its obligation to represent the Isle of Man in foreign affairs. Did you catch it? You didn't blink did you?

Blair


Times article

  • rippedoff
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  • Fri, 24/10/2008 - 12:27

Thanks Blair, interesting stuff. I share your view that maybe, just maybe "The UK is not the only country involved in this process" is diplomatic code for pay your debts to us and IOM and we'll sit down with you.
Lets hope anyway.


I'd like to hope that

  • Captain Mainwaring
  • 11/10/08 31/05/09
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  • Fri, 24/10/2008 - 06:32

I'd like to hope that something could be read into to this, otherwise the IMF are condoning what amounts to being an undisharged bankrupt with gambling debts getting credit to gamble again.


Treasury's Hint at IOM Support

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  • Fri, 24/10/2008 - 12:03

Captain - I think that what the above referenced TimesOnline article suggests, but time will tell. I think the UK Treasury has to walk a fine line in negotiations with Iceland; cutting a deal for the UK and representing IoM / Guernsey's interests too. And probably working back channels to get IMF support for "all creditors" equally. I imagine there is a difference between what they do and say in private meetings and their public stance. I think privately they are for an "international solution - lets do a deal", and publicly it's more "hardline, pro-UK mainland". Just a gut feel. Blair


Without a doubt the Treasury

  • Captain Mainwaring
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  • Fri, 24/10/2008 - 12:05

Without a doubt the Treasury cannot be seen to be pro IoM bailout, it has to be under perceived extreme duress.


Iceland Update: Seen Turning to IMF

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http://online.wsj.com/article/SB122425739356744673.html?mod=googlenews_wsj
Wall Street Journal. Abbreviation Follows:

Iceland in Trouble

The Icelandic government is likely to ask the International Monetary Fund for financial help over the weekend, as the country's foreign-exchange market remains dysfunctional and questions mount over Iceland's near-term debt obligations, a key government official told Dow Jones Newswires Friday.

Glitnir Defaults

The Icelandic Financial Supervisory Authority, or FME, confirmed that the principal of a $750 million corporate bond from nationalized Glitnir Banki Hf. that matured Wednesday went completely unpaid.

Moscow Plays Hard-Ball

With Icelandic officials returning empty-handed Thursday from a trip to Moscow to talk over a four billion euros loan, calls for Iceland to quickly work out aid from the IMF and other willing parties is mounting.

Iceland Down to Its Last 2.3 Bil Euros

Foreign reserves at Iceland's central bank at the end of September stood at 350 Icelandic kronur, equivalent to around 2.3 billion euros at the time. It has been estimated that roughly 10 billion euros would be needed to provide some semblance of support for the krona.

"A sizable foreign loan would be a welcome development in this regard and should help to rebuild the economy's trust in international markets," said Landsbanki. "An obvious path to follow would be seeking assistance from the IMF and additional foreign funding from allied governments."
. _________________________________

Blair's Question for the Day: As I discuss at top, do you see London blessing an IMF loan without consideration? Not me.


Excellent Summary

  • mikepapa
  • 10/10/08 n/a (free)
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  • Sat, 18/10/2008 - 12:57

Dear Blair,

Many thanks for your excellent summary and the rest of your comments on this page.

I have spent most of my life as a British Expat in Africa, apart from 10 years of service in the RN, which included ironically enough, HMS Berwick - 6 weeks Iceland Cod War Patrol in winter 1972 - not a comfortable experience.

There is an Swahili proverb that directly translates - "When two elephants fight, the grass hurts"

Just thought you might enjoy and/or reflect on that one! :-)


mike jambo!

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  • Sat, 18/10/2008 - 13:00

mike jambo!


Lucky Lux and Belgium

  • 491
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  • Sat, 18/10/2008 - 10:42

Reuters: "Russia is not yet convinced it should make a loan to Iceland to help dig it out of a financial crisis, a Russian source said on Friday.

"But as the island ran down more of its meager foreign reserves, Iceland said it hoped its biggest bank, Kaupthing, would next week be able to re-open its Luxembourg branch to pay back Belgian and Luxembourg depositors.

Two comments: a) Back to the IMF! b) Lucky Luxembourg! Blair


Why not IOM

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  • Fri, 24/10/2008 - 10:23

Hang on why is Kaupthing hoping to pay back its Belgian depositors .
Why do they get first priority i wonder?
What is the IOM government doing?
Why dont they ask for a loan from the IMF?


bblair yers my russian souce

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  • Sat, 18/10/2008 - 10:50

bblair yers my russian souce of such info is very quiet I must,, but generally if a Russian statement said it isn't then you can be pretty sure that it is!!!!


My Deposit Hangs on Missile Defence

  • 491
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  • Sat, 18/10/2008 - 11:01

You can't blame the Sovs for playing hard ball. If you were Putin and Coni Rice had just cut a missile shield deal with Poland. How would you view the recent "opportunity" in Iceland's weakness? Strategically right? This isn't rocket science people... it's rocket placement! You gotta figure NATO hasn't missed the import of this? Icelands greatest bargaining chip right now is its proximity to London, Berlin and Paris and its gateway to the North Atlantic. This would be very funny if it wasn't absolutely true. Blair


totally correct bblair vlad

  • expat
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  • Sat, 18/10/2008 - 11:13

totally correct bblair vlad likes nothing better than to flex his biceps, i have always assumed that this is what would ge the iMF involved, to stop vlad from flexing his torso so close to the more demure europeans!!!


Cold War and Bank Deposits

  • 491
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  • Sat, 18/10/2008 - 11:46

Hey Expat: Did you ever think the security of your bank deposits would depend on a new cold war? Hilarious really. Blair


ah bblair that does assume

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  • Sat, 18/10/2008 - 11:52

ah bblair that does assume that the last one has finished, which it never hhas on the steppes, to be honest this whole situation is the funniest set of circumstances i have ever seen. if it wasn't so costly i'd be rolling in the aisles really, never knew G Brown was a comic of such epic proportions!!


Isle of Man & IMF

  • brokemanx
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  • Sat, 18/10/2008 - 09:45

At the beginning of last week there were questions about the whereabouts of the Isle of Man's Treasury Minister, Alan Bell. He was in Washington, with the senior civil servant from that department at an IMF meeting. Here is the report from the North American Manx Association http://namanx.blogspot.com/ :

"WASHINGTON DC, October 13, 2008 – Treasury Minister, Allan Bell, in Washington to attend the IMF-World Bank Annual Meetings, held informal meetings over the weekend with the leaders of the international financial institutions and with ministers and officials of both industrialised and developing countries. Of particular note was the Minister’s lengthy and helpful discussion with OECD Secretary General, Angel Gurria, who has recently characterised the Isle of Man as a model for its openness and cooperative stance towards other jurisdictions.

On Saturday, the Minister was the keynote speaker at the Small States Forum hosted by the World Bank where he met its President, Robert Zoellick. “The president had just come from a tense G-7 finance ministers meeting and discussed the more coordinated international response to the global financial crisis that has emerged over the past few days. He stressed that now is the time for governments across the world to start putting in place improved regulatory and other policies rather than waiting until the crisis has run its course.”

This is the first time that a delegation from the Isle of Man has attended the annual meetings of the IMF and World Bank and follows the election of the Island as the first Associate Member of the Small States Network for Economic Development. In his statement to the Small States Forum, the Minister announced a major new initiative that will leverage the Isle of Man’s financial sector expertise to benefit of other small states, many of which are amongst the poorest countries in the world.

An innovative executive education programme run by Oxford University’s Saïd Business School will enable some 25 officials a year from the central banks, finance ministries and regulatory bodies of small states to improve their ability to manage their financial sectors and engage more effectively with the global financial system.

The initiative will bring together leading professors from Oxford, Harvard, and other universities, along with practitioners from throughout the world, including several from the Isle of Man, to engage with 25 small state officials each year for a two week highly participatory programme using the facilities of the Isle of Man International Business School, starting in September 2009."

I can't believe that more pressing matters were not also discussed. The island has had good IMF reports in the past
http://www.gov.im/lib/news/treasury/imf.xml
and I am sure would want to keep them in the future.


A clear, concise analysis

  • IceCrusher
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  • Sat, 18/10/2008 - 06:18

A clear, concise analysis Bblair, you've summed it up.


Legal Larceny

  • Lucky Jim
  • 13/10/08 31/05/09
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  • Sat, 18/10/2008 - 00:18

A bank robber is a common criminal - when caught he pays for his crime -- that's called JUSTICE

A bank is a place where money is guaranteed to be totally secure. A bank abuses the trust placed in it when it robs depositors of their money -- that is a crime but those responsible for the felony are not considered to be bank robbers - that's called INJUSTICE

A government that endorses that injustice is an accessory to the crime. It must pay the depositors the money that has been stolen -- that's called JUSTICE

If the Government does not protect depositors from losing their money then the banking system will fail AND THE GOVERNMENT WILL FALL.


Who's Crime Really?

  • 491
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  • Sat, 18/10/2008 - 01:13

Kaupthing management? Their only crime seems to be successfully growing the bank from an economy too small to support it. Even this would not have been a problem if it didn't coincide with global financial meltdown. No one who works for Kaupthing stole my money. How about the Icelandic government? Yeah, I think its current shell game with my bank's assets is a serious problem. And how about the British government? Yeah, I think their decision to use anit-terror legislation was bogus. And their decision to force a technical default was negligent. The Brits caused a run on banks that were no more questionable than RBS or Barclays. They did this using the "precognition" that they didn't think Iceland would honour its obligations. Then it froze our IoM assets to secure its own UK-based deposits - not a lot different from what Iceland is now doing. Governments have robbed these banks. Blair


Icelands Theft

  • Dave1
  • 10/10/08 31/05/09
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  • Fri, 17/10/2008 - 23:56

Blair - excellent analysis.
Further weight to why we MUST ensure deferral of the 24th October court hearing. Liquidation on Friday would be extremely premature!
Understand any decsiion to defer 24th is not Mike Simpson's responsibility, but the IOM FSCs.
So have written to John Aspen myself. Urge everyone to push for delay of this court hearing


Wind-Ups and Guarantees

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  • Sat, 18/10/2008 - 01:00

Dave: Looks like we have both been in touch with Aspen. However, it seems to me that if Iceland continues with the "New Kaupthing" shell game that's going on, avoiding wind-up to equitize the guarantee will be less relevant. For the guarantee to survive, there would have to be the will to continue Kaupthing as a going concern. Iceland seems to be clearly forcing this issue by this very aggressive form of nationalization : scoop the assets, kill the company, kill the liabilities. Iceland can do this (I guess) but it then pushes the issue to the international community and I think they know that; who will bail this country out after it just stole $62 billion? It's a way to get the central bank support they were denied a few days ago - Viking style. Blair


Everybody happy? Everyone paid back? Iceland saved? Perhaps?

  • steveejeb
  • 10/10/08 31/05/09
  • a depositor
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  • Sat, 18/10/2008 - 01:24

Blair: I agree, but this was always going to be the case. Iceland have nothing else to lose or do they? HMG realised they could shift the blame to Iceland (if not legitimately). The current UK government have alway wanted a way to get at the offshore banking sector, and now they have it in spades.

Surely the fact that Iceland just go out and start a "new bank" does not overcome their International banking problem and kudos. Who the hell (Internationally) is now going to bank with Iceland knowing that they have just parked their biggest bank with all its guarantees, start a new one, and say hey guys come on in?

The answer? Iceland IS going to get IMF bailout, our KSFIOM via Kaupthing hf is ring fenced as a debt to be sorted out. The UK, thanks to IMF bailout for Iceland does not have to dig into it's pockets to sort out the Icelandic debts and the fallout relating to offshore accounts.

Everybody happy? Everyone paid back? Iceland saved?

Perhaps?

PS We still need to get the winding up date on the 24th postponed!!


Defer hearing

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
  • Offline
  • Sat, 18/10/2008 - 07:39

I think there is nothing to be lost by it and have sent an email based on your template.


Emails to IMF and Iceland PM

  • TCA
  • 12/10/08 31/05/09
  • unspecified
  • Offline
  • Sat, 18/10/2008 - 08:01

Done.

Sent to mschrader(?)imf [dot] org

Dear Ms Shrader

I understand that the IMF may extend a loan to Iceland to assist in the current financial crisis. I respectfully ask that one of the terms of that loan is that the Icelandic Government should honour a parental guarantee given by Kaupthing Bank hf covering deposits in its subsidiary Kaupthing Singer & Friedlander Isle of Man Limited (KSFIOM). The details of this bank, which is in provisional liquidation can be found at:

http://www.fsc.gov.im/ViewNews.gov?page=lib/news/fsc/kaupthingsingerf3.xml

I and many thousands of savers in this subsidiary could lose our life savings if this bank goes into liquidation on 24th October. There are no funds in the Isle of Man to award compensation under their scheme and the UK government, despite largely precipitating this situation, is doing nothing to help offshore depositors in its UK Crown Dependency the Isle of Man. We could well be left to hang out to dry. A loan from the IMF therefore may well be the most realistic hope for depositors to get their money back. Iceland has now nationalised Kauthing Bank hf in Iceland, so the Icelandic government must be made to stand behind the parental guarentee. I implore you to look at some of the heart breaking stories on the KSFIOM Depositors Action Group website, set up to highlight the plight of those affected in this terrible situation.

http://www.ksfiomdepositors.netgenius.co.uk

Please do what you can to ensure the Icelandic government honours its promises.

Regards....

And to the Iceland PM at geir(?)althingi [dot] is

Dear Mr Haarde,

I am one of many thousands of savers in Kaupthing Singer and Friedlander Isle of Man Limited (KSFIOM), who stand to lose their life savings should the bank go into liquidation next week on 24th October.

As its parent company Kaupthing Bank hf has now been nationalised and is under your government's control, I implore you to do something to honour the parental guarantee on my savings before it's too late. I appreciate that this terrible situation may well have been precipitated by the UK government's action in freezing Icelandic funds but I can assure you that neither the UK or the Isle of Man authorities are doing much to help offshore savers like us. You only have to look as far as Landbanksi in Guernsey to confirm that.

Our last hopes rest with either a buy out of KSFIOM (which looks unlikely) or more probably with an IMF rescue loan to Iceland from which our parental guarantee is honoured. We are bona fide depositors who placed a great deal of faith in this guarantee from Iceland's biggest bank and I hope and pray you will act honourably to ensure we get our money back.

You are probably aware that the KSFIOM Depositors Action Group have set up a website to highlight the plight of those unfortunate to be caught up in this. Some of the stories are truly heart breaking.

http://www.ksfiomdepositors.netgenius.co.uk

Please help us and soon. Time is running out.

Regards.....


TCA, excellent

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
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  • Sat, 18/10/2008 - 08:27

TCA excellent, I shall send copies, thanks!


NG could we have a tick

  • sleeplessnight
  • 10/10/08 30/06/09
  • unspecified
  • Offline
  • Sat, 18/10/2008 - 08:33

NG could we have a tick list/action list for everyone to check. So many good ideas on here, need to make sure we ALL cover EVERYTHING, e.g paper petition, email petition, letters as above, local MP, local PPC, letter to postpone wind up, Telegraph re expat posting, and so on an so forth? (unless I've missed it? - apologies.)


To Do list?

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
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  • Sat, 18/10/2008 - 09:27

I have been thinking the same thing, it's getting ever more difficult to keep up with what's outstanding. I go off to write a couple of emails and there's heaps more to read and do when I get back! We need one dedicated action list where all 'to do' items are kept. What has happened to the electronic petition, I did some editing then got distracted by the paper version - any notion of where its at?


action list

  • wood
  • 12/10/08 30/05/13
  • a depositor
  • Offline
  • Sat, 18/10/2008 - 08:41

Agree. I already asked ng for this - sure he's going to get to it


Iceland Needs & Deserves Attention

  • 491
  • 11/10/08 31/05/09
  • unspecified
  • Offline
  • Sat, 18/10/2008 - 07:19

I don't think Iceland - in setting up New Banks - is seriously aspiring to do business internationally. They know that game is over. It's really about taking assets from "Old Banks" to feed its local depositors and right its foreign reserve crisis. More importantly this is Iceland's cry for attention. Iceland to the G7: "We are desperate will you help? No. Ok, we'll talk to Russia - you know Russia - they are a tad pissed off about missile systems in Poland. Will you help now? No. Ok, watch while we take $60 billion of assets backing your deposits. How are you liking it so far? Will you help us now? Do we have your attention?" I'll bet Haarde almost choked on his corn flakes when the G7 didn't respond to his Russian initiative! This guy is like, "What does it take to get some attention around here?!" Iceland just needed help and I think they would have got it if the G7 wasn't too busy with its own nightmare. But I suspect the G7 are listening now...very attentively. There is nothing like a $60 billion poke in the eye to wake you up. Steve, I think the IMF now has to act. But as I discuss above, there will have to be terms - if only to keep London happy. Blair


stevejeeb we always did need

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Sat, 18/10/2008 - 06:08

stevejeeb we always did need to do that, we just misssed it off the action list, can't think of everything y'know!


LEtter to John Aspden at FSC to DELAY 24 October liquidation hea

  • Dave1
  • 10/10/08 31/05/09
  • a depositor
  • Offline
  • Sat, 18/10/2008 - 01:34

AS MANY AS POSSIBLE - something like this please:

To: john [dot] aspden(?)fsc [dot] gov [dot] im
cc: mike [dot] simpson(?)iom [dot] pwc [dot] com

Dear Mr. Aspden,
As a depositor with KSF (IOM) Ltd, and now potentially facing the loss of the majority of my life savings, I implore you to consider the wider implications of moving to liquidate KSF next Friday 24th October.
So long as political and business options are still being evaluated to keep KSF (IOM) afloat, I would ask you to instruct the Liquidator Provisionally to delay the court hearing, or defer any decision to liquidate on 24th October.
I am sure you are well aware that the consequences of liquidation of KSF (IOM) will not only be disastrous for KSF (IOM) depositors. The fallout will threaten the very survival of UK offshore banking.
I would be grateful for your response at your very earliest convenience.
Regards


Just emailed them both

  • madmax836
  • 10/10/08 31/05/09
  • a depositor
  • Offline
  • Sat, 18/10/2008 - 13:01

Aspden and Simpson both emailed


Email to John Aspden

  • TCA
  • 12/10/08 31/05/09
  • unspecified
  • Offline
  • Sat, 18/10/2008 - 05:10

I've just fired an email off to him (cribbed from Dave's version - ta) to request postponement of the liquidation order. This is the guy who needs to be made aware of the consequences of his actions. Let's let him know now where we stand on this:

Dear Mr Aspden,

As a saver with KSFIOM Ltd and therefore currently faced with losing my life savings, I implore you to consider the wider implications of liquidating KSFIOM next Friday 24th October.

So long as political and business options are still being evaluated to keep KSFIOM afloat, I would ask you to instruct the Liquidator Provisionally to delay the court hearing or at least defer any decision to liquidate on 24th October.

I am sure you are well aware that liquidation of KSFIOM will be disastrous for depositors like myself who stand to lose everything and could precipitate disaster for the IOM banking sector and economy, and perhaps the entire offshore banking operation as we know it. There is still time to rescue this situation be it in the form of IMF loans to Iceland or a potential buyer for KSFIOM itself. Even if the Liquidator Provisionally was able to recoup the inter company loan to KSF UK (and or the parent company), then KSFIOM would be back on an even footing and able to resume busines as usual, so please give time for all avenues to be investigated before closing the door on KSFIOM.

I am sure you aware of the KSFIOM Depositors Action Group and the website set up to highlight the plight of KSFIOM depositors with a view to seeking recovery of their savings. Some of the stories are heart breaking, so I beg you to consider all options before winding up KSFIOM:

http://www.ksfiomdepositors.com/

I would be grateful for your response at your very earliest convenience.

Regards


Email to John Aspden

  • wood
  • 12/10/08 30/05/13
  • a depositor
  • Offline
  • Sat, 18/10/2008 - 08:18

Just done emails to both too re postponement. MORE NEEDED


done

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Sat, 18/10/2008 - 08:24

done


Letter to John Aspden

  • C_south_africa
  • 10/10/08 31/05/09
  • a depositor
  • Offline
  • Sat, 18/10/2008 - 08:30

Done

Dear Mr Aspden,

I am a saver with KSFIOM Ltd and therefore currently faced with losing my hard-earned life savings, and therefore a bleak and impecunious future.

I am sure you are well aware that liquidation of KSFIOM will be disastrous for depositors like myself who stand to lose everything they have saved. There are many of us here in South Africa, Zimbabwe and Mozambique who without this money shall be destitute, as there are no social welfare systems available to us here in this region.

I implore you to consider the wider implications of liquidating KSFIOM next Friday 24th October.

So long as political and business options are still being evaluated to keep KSFIOM afloat, I would ask you to instruct the Liquidator Provisionally to delay the court hearing, or at least defer any decision to liquidate on 24th October.

There is still time to rescue this situation so please give time for all avenues to be investigated before closing the door on KSFIOM.

I implore you to consider carefully, bearing in mind the real hardship you will cause if you are precipitous in this matter.

I should be grateful for your response.

Regards

(name)
Johannesburg
South Africa