Communications Sent in Response to Aspdengate Blog, Please Post Sent & Recd Here

  • Tricky Dicky
  • 24/10/08 30/05/09
  • a depositor
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Posted: Fri, 13/02/2009 - 10:51

I have opened this as a forum topic so that members can add what they send (and any replies) to IOMG/FSC/IOM Media etc etc on this subject, so that it will be all in one place for future reference
Whatever you write, please take into account the notes raised by Lucky Jim in his topic Communicating with the Media

Posted 13/02/2009 - 10:40 by LondonTeam

John Aspden needs to urgently consider his position! !

As reported in and confirmed by the Manx Herald:
Mr Aspden, CEO of the FSC, thinks it’s “virtually impossible” to have a regulatory regime which satisfies both the “commercial imperatives” of the banks etc and provide the safety sought by depositors. He said the two are “incompatible”.

Mr Aspden said banks, although not “core banks”, should be allowed to fail; and linked this to the ‘risk-reward’ curve. The clear implication was if ‘customers’ chase higher returns they should also have to accept higher risks and the potential for a loss.

He made these remarks on January 28th, just six days before giving evidence at theTreasury Select Committee: “

Here we were, thinking that a bank on the Isle of Man, triple A rated no less, was able to offer a point higher on interest because it operated in a low business cost jurisdiction but with “an effective regulatory regime under the auspices of the Financial Supervision Commission for protection of investors.”
We thought the bank failed because some fool on the Isle of Man, worried about events in Iceland, allowed about 60% of its assets to be placed in another Icelandic subsidiary in London.. But, oh no!, apparently Mr Aspden thinks WE are the fools for depositing our savings there at all!

Late last night, the DAG issued a press release calling for Mr Aspden to consider his position since it appears that his views cannot be reconciled with the requirements of the institutions and their customers wishing to deposit their money in banks.
Should someone with such views be allowed to continue as head of the FSC ? Surely his views are now incompatible with his position?

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Letter to Tynwald members

  • Nixi
  • 20/10/08 31/05/09
  • a depositor
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  • Fri, 13/02/2009 - 21:51

Circulated to me and reproduced with permission:

Members of Tynwald
Ladies and Gentlemen

Thank you very much for your responses, both individually and collectively through Christine Clucas of the Isle of Man Government, to my last email.
I had not thought to bother you again but I was very disturbed by the comments reported to be made recently at Compliance Institute Conference by John Aspden, Chief Executive of the FSC. A lot of the content appears to be either incorrect or in appropriate, but one remark offended me more than others and that was the statement: "If ‘INVESTORS’ chase higher returns they should also have to accept higher risks and the potential for a loss of their INVESTMENT."

So he told the assembled finance industry that we are INVESTORS. I was not an investor in the bank and never held shares in it. My wife and I are DEPOSITORS, plain and simple using the bank for day to day banking - with savings being a secondary use. Most of the other depositors are in a similar position to my wife and me, and only a minority of individuals are ‘investors’ of large amounts.

For your information about twenty years ago I was a civil servant working for HM Customs & Excise and was seconded to the Ministry of Defense, Cyprus. My salary was UK tax paid at source. I was having trouble using my then bank – Lloyds in the UK – from abroad so I discovered that Cater Allen Bank IOM (CA) gave an excellent service. So I changed to them. FOR THE SERVICE, NOT FOR HIGHER RETURNS – I didn’t have any significant savings then. My civil service salary was paid into my CA bank both when I was in Cyprus and later on my return to the UK. Anyway I stayed with CA until they taken over by another bank and their service deteriorated. I then transferred to Singer & Friedlander IOM (S&F). Their service was, and has been up to the crash, as good as CA’s used to be. So I stayed with them.
After I retired from the UK Civil Service I worked as a consultant for the UK Government (DFID & F&CO), the UN, EU, World Bank and others in various countries and managed to save a little money for our retirement. The final amount saved, and kept at S&F ( but then trading as Kaupthing Singer & Friedlander IOM) as at the time of the crash, was £120,000. That equates to £60,000 per person. Not a huge amount and certainly not kept there for the ‘higher returns’ as claimed by Aspen. It stayed there because it seemed the natural thing to do to keep my savings at the bank I did my normal day to day banking with. I paid my taxes at whichever country I was living ‘permanently’ in at the time. First Cyprus, then South Africa – and now I / we have returned to the UK for (an impoverished) retirement.

At this point I must state the advantages I found in banking with (K)S&F IOM:
• I could receive, transfer and pay fees and other monies easily in other currencies (mainly Dollars and Euros) in and out of Sterling.
• I received the same banking service as i would have got had I been with a UK based bank. Direct debits, standing orders, Chaps etc payments, Sterling cheque book.
• The banking costs were reasonable.
• The service was excellent. The staffs were always friendly and helpful and never tried to sell me other products without my asking first.
• Finally, as an overseas resident I could not have opened a UK based bank account even if I had tried. The reason being was that I had to resident in the UK and produce utility bills for a residence in the UK. Which I did not have.

In brief some of Mr. Aspdens other statements that affect his credibility and that of the Isle of Man, are;
1. “Banks, although not ‘core banks’, should be ALLOWED TO FAIL”, and he linked this to the ‘risk-reward’ curve. So here we have it loud and clear, the KSFIOM should be allowed to FAIL!
2. “The consumers need educating regarding ‘Investment decisions’". Perhaps then he, and the IOM Government, could start by widely advertising the risks of Depositing in banks in the Isle of Man thus educating the consumers!
3. On the KSFIOM issue he claimed he was not to be an ‘expert’ on the subject and that the IoM Treasury are leading on this matter. If he is not an ‘expert’ who is?
4. Mr. Aspden also touched upon the practice of ‘upstream lending’ (an integral issue of the KSF IOM ‘affair’), and pointed out "it is not just a phenomenon peculiar to the IOM but also happens a lot in London and Luxembourg etc." Perhaps but probably not in the way he is trying to Infer. What he failed to address (not surprisingly) is why did they (the bank) upstream it all within the same group i.e. keeping it within an Icelandic bank? Because of FSA and FSC advice?
5. Of course nowhere do we see a statement that the FSC are working to return 100% to all depositors. However if he had said that, then he would have totally contradicted his entire argument as set out to the assembled finance industry personnel

Finally I do hope that you all have read the following article in the Manx Herald. It’s not just the KSFIOM depositors that are concerned about what has happened!

Yours faithfully

Note: Tynwald contact details here if you want to drop them a note:

Aspdengate & the Manx Herald

  • Lucky Jim
  • 13/10/08 31/05/09
  • not a depositor
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  • Fri, 13/02/2009 - 18:29

My comment posted to the Manx Herald


Despite the IOM's recent triple AAA credit rating news is coming to the Depositors' Action Group that the banks in the IOM are in real trouble as money is being withdrawn, new deposits dry up & Bank staff are staring into the abyss.

The Kaupthing depositors are already being blamed for this, but it is NOT our desire to see the financial services sector collapse like it has in Iceland. In reality depositors too would suffer even worse than they are doing now.

Right now the IOM's banks are doomed not by disaffected Kaupthing depositors but by the international banking crisis and the totally incredible statements being made by John Aspden, chief of the Island's Financial Services Commission.

The IOM Government has got to act fast to stem the flow of the lifeblood of the IOM. Bank Managers should call for an urgent meeting with Tony Brown & the Treasury and not come out of it until they have come up with a plan that rescues the Island and restores to depositors 100% of their deposits.


Duplicate stream..? See " JOHN ASPDEN CHIEF OF FSC SAYS.."

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
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  • Fri, 13/02/2009 - 14:02

I've made a suggestion to ng along the line of merging this stream and the "JOHN ASPDEN CHIEF OF FSC SAYS - BANK SHOULD BE ALLOWED TO FAIL".....
Tricky Dicky I apologise if you feel I'm being impertinent, that is not my intention, I was just thinking housekeeping.

Merging two threads

  • ng
  • 11/10/08 31/12/20
  • a depositor
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  • Sat, 14/02/2009 - 22:29

Unfortunately the CMS does not provide a reliable way of merging threads, or moving a set of comments from one thread to another. The only thing I can do is to freeze one thread, and copy/paste another thread into a single post - not very elegant.

Duplicate Stream

  • Tricky Dicky
  • 24/10/08 30/05/09
  • a depositor
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  • Fri, 13/02/2009 - 14:11

Thats not a problem if ng has time,, I just thought similar to Replies from MP's it would be a good idea to have all the comments and replies in one place for this specific topic, for future reference and our legal team if needs be.

Nowhere did I see a warning

  • mrken30
  • 10/10/08 31/05/09
  • unspecified
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  • Fri, 13/02/2009 - 15:02

Nowhere did I see a warning that I could lose 100% of my savings. When buying stocks I am always given a warning that they could go up aswell as down in value. As a regulator why was this warning not given?