JOHN ASPDEN CHIEF OF FSC SAYS - BANK SHOULD BE ALLOWED TO FAIL

  • steveejeb
  • 10/10/08 31/05/09
  • a depositor
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Posted: Thu, 12/02/2009 - 06:32

I make no apologies for posting this in the forum in its entirety as I believe we need to see exactly how John Aspden the Chief of the FSC operates. It shows ,more worryingly, what he thinks of ourselves as INVESTORS and where the IoM are going with this. I hope you will be as outraged as I am reading the article. I will start the comments off by highlighting a few of his statements when he addressed his peers in the financial Industry last week. I found his statements to be insulting, misleading and derogatory.

1.) Quote "The clear implication was if ‘INVESTORS’ chase higher returns they should also have to accept higher risks and the potential for a loss of their INVESTMENT."
So, he has tried to tell the assembled finance industry that we are INVESTORS. I was not an investor in the bank and never held shares in it. I am a DEPOSITOR plain and simple, who took out a one year fixed term deposit a year ago. Nowhere on the packet did it say the value of your DEPOSIT can also go down depending on the market. Quite the contrary my paperwork told me that after 1 year the deposit with interest would be worth exactly (£x), backed up by a 100% parental guarantee. Not only that, I actually moved my money OUT of other investments into a AAA rated bank precisely to AVOID RISK. It is staggering but cunning that Aspden would choose to use the word investor when talking about people making a DEPOSIT in a bank thus distorting the facts by trying to imply that Depositors in a bank are the same as investors in the stock market.

2.) Quote: "Mr Aspden expressed concern as he said banks, although not “core banks”, should be ALLOWED TO FAIL and linked this to the ‘risk-reward’ curve".
So here we have it loud and clear, the bank should be allowed to FAIL. We are then, just part of the risk-reward curve! Outrageous!

3.) He goes on to add that we the consumers need educating regarding "Investment decisions"
Perhaps then he could start by widely advertising the risks of Depositing in banks in the Isle of Man thus educating the consumers! While he is at it he should also change the IoM regulations (in line with his statement) so that when people come to make a Deposit in an IoM Bank that they are told it is and investment and NOT a Deposit and therefore of course the value of their deposit could go down.

4.) Quote: Turning to the KSF issue," he claimed not to be an ‘expert’ on the subject and that the IoM Treasury are leading on this matter" he also told the assembled that with regard to the fate of KSF depositors (liquidation or SoA) that, "there is extensive cooperation between all the parties including depositor groups".
Oh really? I was under the impression that we can't get a straight answer out of the IoM regarding liquidation or hard facts about the proposed SoA. Far from extensive co-operation with us it is more like take it or leave it!

5.) Quote: Mr Aspden 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 upstream it all within the same group i.e. keeping it within an Icelandic bank? Even they admit to serious concerns about Iceland and the very parent bank itself so why then effectively just transfer it from one branch to another?. The funds should have been placed with a 3rd party bank in the UK if they were trying to protect the bank and the depositors. Why didn't they?

6.) Quote: Mr Aspden said "As for ‘ongoing scrutiny’ (of the IoM), that he was "very upbeat" and stated "that nobody leaves the IOM with a bad view."
Perhaps not? More realistically however is that this will be because most people will be very pleased to see the back of the IoM and never be returning!

7.) Finally of course nowhere but nowhere do we see a statement that they are working to return nothing less than 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. No doubting where his allegiances are and it sure as heck isn't with the DEPOSITORS.

FSC ‘Chief’ John Aspden tells C I Conference ‘regulation’ not coped well with banking crisis

‘Unfortunately’ he thought it “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”.

Chief Executive of the IOM Financial Supervision Commission (FSC), John Aspden ) informed the audience at last week’s Compliance Institute Conference the present regulatory structure had not coped well with the current financial situation.

For people facing the loss of their savings and investments this is probably the understatement of the century; and it is difficult to see, however candid and remorseful the admission, what good it will do these people.
In making this admission, Mr Aspden made out that, ‘fortunately’, things were perhaps not quite so bad for the IOM as it does not appear institutions in the IOM are exposed to a raft of ‘toxic’ assets or subprime problems. In fact, he said, some banks and CSP’s, he had visited recently, are reporting that profits are good.

‘Unfortunately’ he thought it “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”. Reassuring stuff indeed for savers.

Probably more for the comfort of the audience, made up of finance industry personnel, rather than their customers, Mr Aspden offered the assurance that regulators are not “huddling in a room thinking up extra regulation” as they are too busy “fire-fighting” the present problems. He suggested if anything they would more likely to be indulging in a bit of contemplation and reflecting on what has occurred.

He pointed out that regulation is only capable of dealing with some risk but it is not able to provide a complete safeguard.He said that one of the biggest failings of the regulators, which had caught the UK “on the hop”, was they had failed to appreciate that depositors had not moved away from the idea of 100% security of their deposits. They had thought people had been ‘educated’ to accept more ‘risk’ but that the Northern Rock ‘affair’ demonstrably showed this was not so; resulting in Alistair Darling having to underwrite the whole of the UK banking system.

Mr Aspden expressed concern at this development as he said banks, although not “core banks”, should be allowed to fail; and linked this to the ‘risk-reward’ curve. The clear implication was if ‘investors’ chase higher returns they should also have to accept higher risks and the potential for a loss of their investment. However, he said this risk acceptance is “now rewound” and will probably not return; although, he added, it does not remove the need for the debate on consumer education regarding investment decisions.

He predicted their will be changes to Basel 2, as one of the key issues will be finding the right framework going forward, along with changes to Pillar 1 & 2 and requirements on ‘transparency’ (i.e. all matters relating to capital, liquidity and risk ratios etc).
Mr Aspden 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.
He suggested that preventing ‘upstreaming’ would miss the point and that it is more an issue of addressing on what terms and how it was done; which, he said, probably is a commercial matter between host and parent.
In respect of ‘credit quality’, Mr Aspden said it is not such an issue in the IOM, albeit it is an issue globally and so it will affect banking confidence locally as well.
On the subject of ‘supervisory cooperation’, he explained that it varies depending on the market conditions appertaining at the time, and therefore this needs a rethink. “When the going gets tough it is every man for himself” which he said was not what is needed.

This was probably a reference to the situation that Mr Aspden gave evidence about to the House of Commons’ Treasury Committee, yesterday (3rd Feb). During his evidence he recounted how the FSC and the UK Financial Supervision Authority (FSA) had worked well together on a previous matter, but when the KSF collapse occurred in the UK co-operation from the FSA effectively evaporated. As for ‘ongoing scrutiny’ he was very upbeat and stated that nobody leaves the IOM with a bad view.
A move towards ‘Pan-European regulation’ is anticipated, he explained, as there is strong body of opinion that it is quite a good idea; but currently it is not the time for it. ‘Custody arrangements’, he said, are an issue in light of the problems that have come up recently with client accounts. He said the view in some quarters is that as they are held ‘off balance sheet’ they should be completely retrievable. This will be looked at very closely along with some of the assumptions being made. He claimed key issues such as ‘set-offs’, ‘designations’ and ‘pooled arrangements’ are also “bubbling away” but are not being “articulated”.

Turning to the KSF issue, he claimed not to be an ‘expert’ on the subject and that the Treasury are leading on this matter. He said the key issue is whether there should be a ‘scheme of arrangement’ to allow the ‘run-down’ of the bank or a formal liquidation; and that there is extensive cooperation between all the parties including depositor groups. With regards to KSF (IOM)’s upstreaming activities, the 50% of funds held upstream was not unusual, and in fact it was less than some other deposit takers. He put it to the audience it is not unreasonable to rely on some form of assurance from the ‘parent’ business or other supervisory bodies; but acknowledged this needs looking at in the future.
Before handing over the platform to his opposite number in the Insurance and Pensions Authority, he made it clear that, as he stood there at that moment, there is no evidence that KSF (IOM) was mismanaged, of fraud or exposure to seriously toxic assets.

link http://www.manxherald.com/index.php?news=388

[ng: minor edit as requested, erroneous DEPOSITORS->INVESTORS in first paragraph.]

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John Aspden (Chief of IOM FSC) & the Manx Herald

  • Lucky Jim
  • 13/10/08 31/05/09
  • not a depositor
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  • Mon, 16/02/2009 - 19:52

John Aspden has had an interview with the Manx Herald. He said that he did not say depositors were investors. The Paper has admitted it used the word 'investor' and has now amended the article replacing 'investor' with 'customer'. That done it considered that the main thrust of its article was still relevant, & has invited further comment from readers
http://www.manxherald.com/index.php?news=388

This is my response to the editor

Aspden believes that it is “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”. This is utter nonesence! It is precisely this mentality that is one of the reasons why the banks are in deep trouble. It is the avaricious greed of the 'commercial imperative' that gambles depositors' money in high risk ventures. A bank takes a risk when it lets 'liabilities' on its balance sheet exceed its 'assets'.
A regulator who allows this to continue is permitting the risks of 'commercial imperative' to take precedence over the interests of depositors. The latter always must be paramount & since Aspden doesn't think so he should be sacked.

Jim


Time to go...

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
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  • Fri, 13/02/2009 - 15:03

According to the Financial Supervision Commision, its main functions and responsibilities are to:

Protect investors', depositors' and fiduciary clients' interests.
Promote the financial stability of financial institutions.
Promote the highest standards of competence and professional qualification.
Protect the integrity of the financial community.
Protect the reputation of the Isle of Man.

The first ideal indicates acknowledgment of there being both investors and depositors – a distinction allegedly unrecognised by the Chief of the FSC, Mr John Aspden.

Mr Aspden holds the peculiar notion that customers have not ‘moved away’ from the idea of 100% security of their deposits despite being educated to accept more risk. Why would they? When and where did this ‘education’ take place? I have been overseas for sixteen years and it has never come to my attention. I have received pages and pages of applications from dozens of deposit-takers explaining at length why I must sign my very life away before they would even consider allowing me the privilege of saving my monies with them – but nothing telling me that I should sign up for a course in Aspdenomics so that I may find it acceptable to put my life-savings at risk in a regular boring bank. What preposterous baloney is this! No persons holding a regular bank account have need of reeducation; they know exactly what to expect from a bank: the same old boring, but safe place to put one’s money until it’s time to withdraw it – just as John McFall quoted from the Oxford English Dictionary at the Treasury Select Committee meeting on the 10th February.

If Mr Aspden thinks the financial industry has engaged itself in a plot to turn the average depositor’s thinking around to make the impressionable believe it tolerable to lose their whole life-savings in a non-core bank, then he is sorely mistaken. He expressed concern that as depositors won’t go along with this bizarre notion, it upsets the balance of letting some banks fail! No wonder that the FSC aided the Directors of KSFIoM to move 60% of the bank’s assets to another Icelandic subsidiary – just as Icelandic banks were coming under scrutiny – when headed by a nincompoop like Aspden! Which just goes to prove that intelligence is no protection against stupidity. Mr Aspden should realise that to ‘invest’ one’s career in high office can bring huge rewards, but carries the ’risk’ of a great fall when you get it wrong.

When commercial banking interests clash with the need to provide proper protection for regular retail depositors – and the regulator cannot determine compromise – then it works till it fails, at which time the boss fails with it. Sorry Mr Aspden, but for £225,000 per year, IoM customers expected a lot more from you than ‘going with the flow’, now its time for you to go.


captcha code

  • grandmaparis
  • 13/10/08 30/09/09
  • a depositor
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  • Fri, 13/02/2009 - 14:38

I have tried again and again to post my comment to the Manx Herald. In vain. Each time I'm informed that the captcha code is wrong!Perhaps they've had enough and I shouldn't pursue it.


@granmaparis: your problem with capcha code at the Herald

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
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  • Fri, 13/02/2009 - 15:54

Apparently there is a problem, but whilst it suggests to you that your comment hasn't been saved, it is in fact being passed through.


ASPDEN - DEPOSITING IS A "GREY AREA"

  • steveejeb
  • 10/10/08 31/05/09
  • a depositor
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  • Fri, 13/02/2009 - 13:40

Mr. Aspden was given the opportunity by the Manx Herald yesterday to clarify his previous statements regarding depositors and investors. As you will see he does find that the whole issue of who is a depositor and who is an investor a bit of a problem.

He commented yesterday 12th that:

"In respect of the terms ‘depositor’ and ‘investor’ he said he wasn’t aware of a generic definition, but generally a depositor is thought of as someone who makes a ‘deposit’ (in a deposit account); and an investor is someone who ‘invests’ capital in some form or other."

Also

"He (Mr. Aspden) agreed there is potentially a grey area of whether someone is an investor or depositor if the ‘deposit’ is linked to an index or market.
This ‘greying’ is further evident when a range of the available ‘deposit/savings’ products, from a variety of financial institutions, also refer to the amount you ‘invest".

http://www.manxherald.com/index.php?news=388

I was not aware that there is a "grey area" between being depositor and an investor and the fact that Mr. Aspden continues to think so is concerning. No doubt this is part of the "consumer education" that Mr. Aspden previously referred to. He is of course trying to pull back from the statements he made in front of his peers when the IoM hosted the Compliance Institute seminar. Me thinks however the "grey area" lies between his ears. I don't think there is a consumer in the western world who believes that when they place money on deposit in a retail bank that they become subject to the vagueries of investment and risk. No doubt it suits Mr. Aspden to grey the area, infering that when you deposit your savings in a bank you therefore become an investor and subject to his "risk reward curve" .

Just to enlighten Mr. Aspden, who as the Chief regulator for the Isle of Man, might find it useful to know that there are in fact generic differences between a depositor and an investor, a dictionary can often help. If the Chief Regulator did not realise this previously, I am sure that all depositors did.

To Invest according to the Oxford English Dictionary (OED) is to "put money into financial schemes, shares, or property with the expectation of achieving a PROFIT".
To Deposit is a "sum of money placed in a bank account or other savings account & a bank account that earns INTEREST."
There are of course two operative words in these two definitions.
For investment see achieving a PROFIT and for Deposit see earning INTEREST.
Perhaps Mr. Aspden can now see that this is not a "grey area" at all or does he also need to be guided on the difference between achieving profit and earning interest?

Just while we are shedding some more light for the Chief Regulator of the Isle of Man it may well help to give him the OED definition of A BANK (those are the things that used to be on the island),
a bank is "an organisation offering financial services, especially the safe keeping of customers' money until required and making loans at interest". It sounds as though Mr. Aspden wants to update these OED definitions all on his own, perhaps we should contact the Oxford English Dictionary on his behalf?

In stark contrast to Mr. Aspden's views we will not find ourselves short of senior corporate bankers and indeed regulators who will come on record to state that:
Individual retail bank savers are not risk takers and are worthy of protection 2) there is a responsibility on the part of Regulators to protect depositors, they are not shareholders and when they deposit monies with the banks they are not expecting to take on (investment) risk 3) Most regulators differentiate when they designate certain institutions as licensed deposit takers the latter (retail banks) are supposed to act prudently to safeguard depositors money not protect their business model when it results in reckless risk taking. KSFIOM was not a wholesale bank (i.e. one which operates exclusively in the professional markets) but a licensed deposit taker whose customers were majority retail savers and the Regulator and the Bank’s board have an ongoing duty towards their customers.


Definitions

  • Tricky Dicky
  • 24/10/08 30/05/09
  • a depositor
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  • Fri, 13/02/2009 - 13:53

I agree with all you say, I suppose in a nutshell, savers deposit their savings in a bank, it is then the bank who invests it, or perhaps thats too naive and simplistic


My spin on the Apsden's CI conference comments

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

My comment in Manx Herald under it's article on Apsdens comments at the C.I. Conference.

We clearly have enough comments in the Manx Herald, although any fresh interpretation obviously would be useful. What we need is other media in Manxland.

I live in hope that an English newspaper will pick up the idea of "the new cod war".

Looking for another angle, I've heard mention, courtesy of 'Ramsey Peel', and saw a question on the site the other day asking the same thing :Apparently Lovett of Alix partners advice/sentiment whatever ... to the treasury/whoever was listening at the time .... and this was noted in the media .....was that the Kaupthing depositors should be paid up in full..... be this through the use of a loan or whatever.
Does anybody remember where this belief/rumour/myth/fact comes from? I can find no trace of any comment (any comment)from Lovett on google. Has some media record been cleared down? Was it an internal memo?
Anyone remember. It could be very important.

Listening to the "Keys debate" Tues AM on Manx Radio I sensed that Mr Smith was actually walking a political tightrope. Any funding coming from the Isle of Man to resolve this fracaso had to have the support of the Tynwald, and by implication the IoM popn. And when I listened to the speakers I really got the impression of a small parochial community watching the pennies, quite capable of forgetting where a lot of their wealth came from. The impression I got was that the Keys were feeling very generous, having done the right thing in supporting the revised DCS, potential SoA (although they were waiting for the Banks to pick up most of the tab), emergency payment etc.

So you can have a listen again here's the link:

http://www.manxradio.com/audiovault/Keys-1.wma

One final point right now. For anyone who is not familiar with Professor Willem Buiters contribution to the understanding of what has happened, and remember he was the first listed witness for the TSC's hearing on the Banking Crisis, they should acquaint themselves with this. It is a must read. The link..

http://www.voxeu.org/index.php?q=node/2498

==========================================================>

Thank-you for a very informative article.

And thank-you for what I read as the criticism of Mr Aspden’s complacent and arrogant point of view.

On his watch the biggest financial failure in recent history on the IoM has just happened. And he wants to blame everybody else but himself. The FSA, for operating outside their memorandum of understanding with the FSC, the present regulatory system(globally), the normal practice of upstreaming, and the depositors for not realizing that with a market leading rate comes the risk of losing half your money.

The FSC were concerned about possible risk to the bank. The bank here was solvent, it wasn’t knee deep in toxic assets. The upstreaming of over 50% of the assets had been changed from Reykjavik to London to minimize exposure to Iceland months before. The situation had deteriorated markedly. There was more risk and what was done? Mr Aspden seems to have been expecting the FSA to do his work for him, and he feels he was let down by the adoption by the FSA of the attitude “When the going gets tough it is every man for himself” in, one assumes, the last days.

I ask myself just how many other potential crises were the FSC monitoring at the time? Were the FSC not reading the financial press? Did not anybody understand the scenarios under which KSFIoM would be compromised? Didn’t anybody have the thought that just possibly the situation warranted another rethink of the upstreaming of all the banks assets to KSFUK, possibly intervening to minimize risk by ensuring all the eggs weren’t in the same basket?

Or was Mr Aspden thinking “Serves them right, silly depositors thinking they could get a good rate without risk?”

I’m not quite sure who’s interests Mr Aspden's attitudes and actions served. Was it the industry interests, or was it the depositors' interests (‘The sooner they learn, the better off they’ll be’), or the Isle of Man’s ( a bank liquidation, DCS/SoA, political humiliation inflicted by UK, and a lot of very angry ex-clients). I really don’t understand. Or possibly he just wants an easy life (not “huddling in a room thinking up extra regulation”).

I note that you gave him the chance to “clarify” the comments you had noted at the C.I: conference. I don’t actually note any real difference. What I feel is that is he hasn’t grasped the rather simple point that it was a regulation light politic that produced the credit crisis. And I feel that he’s lost sight of, or never really grasped, that the public’s perception of the regulator’s job is the regulation of the industry for the public’s benefit, and within that the regulator has to select an appropriate level of regulation for society’s benefit, not for the industry’s benefit.

I also note that Mr Aspden has been a lot more forthcoming in speaking to the industry than in speaking to the public. As a depositor in Kaupthing I am not aware of any explanation of his actions that he has directed towards ourselves, or in fact the Manx public. Nor am I aware that he has taken up in an appropriate manner the breach of the memorandum of understanding with the FSC.

As you pointed out, and I agree, there is no consolation in his observation that ‘the present regulatory structure (globally) had not coped well with the current financial situation’.

Meanwhile Mr Aspden sails blithely on. My feeling is he should resign.

And thank-you very much again for an impressive article.

David M.


Re: Lovett

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

I read that article about Lovett. It was written in a form of a summary of one journalist's conversation with AlixPartners Managing Director, Mr David Lovett. The objectives and principles of the elaborate scam peddled to us as a "scheme of arrangement" were first briefly explained, but later it was mentioned that Mr Lovett personally favours a different solution; a loan for IoMG and a full payoff for all of us.

I had a distinct feeling while reading it that Lovett, being paid by IoMG, was simply doing what his client expected him to do, but at the same time his professional pride prompted him to hint that this was not the concept he wanted to be famous for.

Who knows, perhaps he is not such a bad man as he seems. Perhaps someone could find out by ringing him up.

Tel: + 44 20 7098 7416 Mob: + 44 7785 293 752


Alix affadavit with IoM Govt.

  • thesunnysouth
  • 10/10/08 31/05/09
  • unspecified
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  • Fri, 13/02/2009 - 15:04

I have just spoken to Mr Lovett on his mobile. He has provided his affadavit to the IoM government and as far as he is concerned they should have been submitted. The stumbling block appears to be the IoM government.
Do we know who is responsible to submit? Presumbly someone from their treasury. If we can get a phone number we can start asking them the same question ' where is our money, where is your affadavit'?
John


Lovett Article

  • kiwi38
  • 11/10/08 31/05/09
  • unspecified
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  • Fri, 13/02/2009 - 14:59

This article appeared mid January re the Lovett comments. It could be interpreted a number of ways re how much of a payout he is reccommending the IOM Govt provide depositors. One thing is clear in that he advises the IOMG to borrow funds to sort this mess out.

I guess he may have had his knuckles rapped for that statement as he now appears to have gone silent.

http://www.citywire.co.uk/personal/-/news/money-property-and-tax/content...


Re : Lovett

  • Tricky Dicky
  • 24/10/08 30/05/09
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  • Fri, 13/02/2009 - 14:46

Hi jkk,
I haven't read or seen this article you speak about, do you have a copy or link to it, I would appreciate that - thanks


Re: Lovett

  • jkk
  • 10/10/08 31/05/09
  • a depositor
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  • Fri, 13/02/2009 - 15:30

I hate myself for that now but I did not save it. Somebody asked for it the other day and I spent 3 hours trying to google it up, but it does not seem to exist any more. It was an article on a website of some regional paper or some other secondary news outlet. I believe I originally found the link to it on this site so perhaps ng can locate it with some advanced magic IT toolbox he may have.

The closest I got to it in my search is this article:

http://www.citywire.co.uk/personal/-/news/money-property-and-tax/content...

but here Lovett recommends that IoM Treasury make a loan to KSFIoM (using their own reserves) and in the article I read he seemed to be talking about the IoMG getting a loan to solve the issue.

One way or another, even this article gives a glimpse of Lovett's early ideas before they degenerated to the level of the scheme described in that scandalous document presented to the court two weeks ago, that he may still regret to have ever written.


Comment added to Aspden's article in Manx Herald

  • SusanfromBC
  • 10/10/08 31/05/09
  • a depositor
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  • Fri, 13/02/2009 - 05:23

http://www.manxherald.com/index.php?news=388

This my comment:

What I would like to know is exactly where does Mr. Aspden deposit his yearly wages of £225,000? It surely couldn't be in an IOM bank.

According to Mr. Aspden my retirement savings, which were DEPOSITED in a SAVINGS ACCOUNT in KSF IOM at 4.5 % interest, was a high risk investment and I should have known better! What incredible audacity!

To Mr. Paul Martin's comment- I would like you to know that I (and many other others) opened my account back when the bank was Singer and Friedlander with a AAA rating. Who knew the Aspden would allow it to be sold to the Vikings in 2005 and that Brown would let the UK run off with our £550 Million? How dare you try to blame depositors for this mess? Shame on you and all of the people responsible for this fraud.

Every other nation has covered their banking losses except for the IOM. The world is watching. If the 10,000 depositors of KFS don't get their money back, does any intelligent person involved in the IOM government and financial industry REALLY believe that it won't affect their reputation? WAKE UP!


is the group going too far

  • giveus backourfunds
  • 13/10/08 31/05/09
  • unspecified
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  • Thu, 12/02/2009 - 18:29

Hi. I have both money in KSf and also work on the IOM in a bank. I heard today that a group here are tyring to get depositors on the IOM to start panicking about what deposits they have on the IOM and move them. kSF if a seperate issue to other banks and all your doing is panicking other acount holders and possibly attempting to the collapse of other banks.

We all through wahtever reason invested money In KSF and some will get back full money and some wont but is that an excuse to start a war on other banks because you have lost money. I fully appreciate the frustartion of anyone who will lose money but is that a reason to put others in the same situation which is what some IDIOTS are trying to do. Most peolpe gripe here is with IFA's and you shoud be sorting them out and no other bank customer.

if anyone in the IOM wants to meet and discuss what your are doing then get in touch, would love to put you straight !!!!


IOM banking is finished - Island will need to change too

  • sami
  • 10/10/08 31/05/09
  • a depositor
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  • Fri, 13/02/2009 - 05:27

If you are so worried about the other IOM banks failing, then why don't you help to DO SOMETHING to ensure the return of depositors' savings, rather than telling us to sit back and take the treatment that's being handed out to us?

Our group are savers who expected the bank to return our deposits. These were not investments but savings deposits. What's more, the FSC have let us down due to their incompetence in ensuring the safety of the principle part of the bank's assets in UK. The FSC continue to let us down and therefore pressure must be put on those to do what is necessary to correct the problem.

The more people who put pressure on these rogues the better and if it takes lots of other depositors in other banks to see our plight and act in everyone's collective interests, all the better. That's what it's going to take to resolve this problem.

It's clear to me that it is time the IOM had a change of focus and those of you who work in banks will need to look for alternative employment. Sorry that's going to be the case, but it's a fact. The current global financial situation is affecting millions of people worldwide - there's no reason why the IOM should be spared.

The Island's banking is finished - face up to it and either help to return depositors' money or get out and find another job instead of being selfish and favouring YOUR job over 10,000 depositors' life savings.


Anger and Action

  • kiwi38
  • 11/10/08 31/05/09
  • unspecified
  • Offline
  • Thu, 12/02/2009 - 22:51

Giveusbackourmoney - your posting has touched a nerve! I am guessing you are genuine given you name and length of membership.

Anger normally causes one to lash out and is often the cause of many crimes - in this case there have been 10,000 depositors left without their money (in many cases their life savings) for four months so surely you can undersand the deep anger and the cool and calculated vow by many to "get even" with the "island that has stolen their money". One poster said "we haven't even started yet" and I think he is right. If this goes wrong for the depositors and we are not repaid 100% in a reasonable time frame then I truely believe the that IOM Financial Services Industry will be ruined over the next few months. 10,000 angry investors can do a huge amount of damage to an economy almost solely reliant upon the reputation of its financial services industry.

I would urge you to speak to your boss, speak to your union, speak to your MHK, in fact speak to anyone of influence on the Island and share your fears with them. Unless the people of the IOM put pressure on it's Government to do the right thing then your economy is headed for the rocks.

I hope that you, your colleagues and your MHK is better equipped at seeing the big picture as your leader, the electrical shop proprietor, seems unable to grasp what is going on and where his country is headed.


now do you get the idea?

  • Anonymous
  • Offline
  • Thu, 12/02/2009 - 23:11

I think that you may have missed the point, but perhaps that is to be expected because you work in a bank.

The point is that the IOMG does not protect depositors in IOM banks. Irrespective of whether or not (some of) its banks might be safe (and we, as depositors, really have no way of knowing that for sure, since we now know that we cannot rely on the IOM regulator), depositors in general cannot trust any bank in the IoM now because it is clear that (a) they are not effectively regulated and (b) the IoM government's compensation scheme was not fit for purpose, which is why the IoMG are doing everything they can to avoid it being activated in our case.

Now do you get the idea?


No, I doubt that he does if

  • calpespain
  • 12/10/08 n/a (free)
  • a depositor
  • Offline
  • Fri, 13/02/2009 - 09:38

No, I doubt that he does if he works in a bank, can you be more specific with this halfwit and give him a more detailed and idiot proof 'idea'


givus backourfunds,You wrote:

  • calpespain
  • 12/10/08 n/a (free)
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 21:59

givus backourfunds,You wrote:

'We all through wahtever reason invested money In KSF and some will get back full money and some wont but is that an excuse to start a war on other banks because you have lost money. I fully appreciate the frustartion of anyone who will lose money'

Lucky Jim, said last week that we should now be careful of infiltrators, you are one of those. I see you have been on here for 17 weeks spying for your boss. Clearly you have little comprehension of the havoc,distress and utter grief, this KSF has caused to many retired expatriates that live abroad.That's people over 65 and many in their 70's and 80's who have lost the lot. And ! their ability to ever replace that money, and yes they banked in the Isle of Man for that added security. That's a bloody joke and, if you had money in KSF, what was it, your pocket money. Mine was my lifetimes savings to support me and my wife for the rest of our lives, go and get a job worth doing and not try and pontificate yourself to us as a genuine depositors. You know, you say' I work in a bank, and clearly you don't understand the difference between investing and depositing. You're a complete arse,go and play on the sand and take your bucket and spade with you, dimwit.

If you think, for one minute that this DAG, has so far put any effort into putting off other depositors from placing their trust in the banks on the IOM then you really do not understand very little. The people on the site and others, that are not, have been waiting patiently for the IOM government to return our money like other nations have done already, But no they are sitting on their arse's trying to see how much they can save for themselves. If we ,that's every single one of us, doesn't get 100% of our money back, yes, then we will do what the IOM government is clearly doing a fare job by itself, bring down your banking industry. No more will any retiree trust any bank on the IOM with our cash. Unlike you, we have worked for our money and saved it, but have had it stolen and not protected by idiots like you. Now *iss off and tell your boss, he's a numbskull.


We are NOT seeking to bring down the IOM Banks

  • Lucky Jim
  • 13/10/08 31/05/09
  • not a depositor
  • Offline
  • Thu, 12/02/2009 - 21:10

In answer to your complaint please kindly note:

  1. For a start we are not INVESTORS; we are depositors
  2. depositors believed the IOM was a secure off-shore place in which to bank; that has proved not to be true in their experience They were given the same assurances that all banks have given, despite John Aspen saying that all banks should tell depositors that there was a risk in banking in the IOM
  3. in the week the bank collapsed I received an e-mail asking me to deposit a large sum and giving me assurances that the bank was a pefectly safe one for my money. That same week the FSC did NOT consider it was so;
  4. every European Government has guaranteed 100% the savings of depositors; the IOM Government is the ONLY one NOT to have done the same
  5. it is NOT the objective of depositors to bring down the other banks in the IOM, but we have a duty to make depositors with them aware of the risks now inherrent in banking there, confirmed by John Aspen
  6. the IOM has has no viable depositors' compensation scheme in place other than the legislation to provide for it should it be necessary. If banks collapse there will be no means to fund the theoretical scheme so it is worthless;
  7. as a consequence truly your complaint is not with depositors but with Tony Brown, John Aspen & Allen Bell.

May I suggest you get your Union to mobilise ALL bank staff in the IOM to demand of your Government that they resolve this debacle by obtaining a sovereign loan from HM Treasury so as to avert the disaster that will inevitably come about if depositors of KSFIOM do not get 100% of their money restored to them. which is their legitimate, just and legal right.

We empathise with the position of the Bank's staff, but they now only have a job at the expense of depositors many of whom are elderly people who have lost all their life savings and been made destitute as a consequence of what has happened. We don't want others to have the same horrendous experience but it could befall them unless the IOM Government wakes up to the reality of what could now happen not because of the DAG campaign but in spite of it.

We would like you to be allies with us to help avert a terrible catastrophy for the IOM. If you would like to do this please e-mail me with your telephone number so that we can discuss how we might work in partnership for the benefit of everyone.


smell the coffee !

  • rbirch
  • 13/10/08 31/05/09
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 20:02

....so most people are blaming the IFAs ?

well i think its about time everyone on the IoM including the govt woke up to the reality. This failure goes far beyond the failure of one bank ... it affects your whole island.

why do you think other countroes are bailing out their banks ? ..so the rot doesn't spread .... what are the IoM govt doing ? .... devising a SoA (which achieves little more than the already existing DCS) and wasting time - fiddling while Rome burns.

nothing concrete has been achieve with this approach ..... its a disaster, and whilst other parties can be blamed ... the only people who can sort this out is the IoM govt. This is not rocket science, they need to get into the real world and do what every other jurisdiction is doing, before its too late.

I can tell you the IoM banking reputation abroad in the international community is in tatters - it needs fixing - fast !


smell the coffee

  • nr8209
  • 12/10/08 31/05/09
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 21:01

It smells more like s*** to me!


IOM Depositor

  • Tricky Dicky
  • 24/10/08 30/05/09
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 19:56

Hi giveusbackourfunds,

I can appreciate your concerns being both a KSFIOM depositor with money locked up in the bank and also employed in another bank on IOM.
I believe as a group we are trying not only to have a 100% return of our deposits (or as John Aspden calls them 'investments'), but also arrive at the truth as to why this situation arose in the first place. As an aside, if the truth is found and this situation resolved to everyones satisfaction then the financial stature of IOM could well be enhanced.
We have no intention of 'panicking' depositors in other banks to withdraw their money, that is something for their own conscience.
Personally if the Government and FSC had acted promptly this mess could have been history by now. However it hasn't been solved, and so the longer it has gone on, the more exposure the debacle has had, especially in light of electronic communications today, in the Press, on TV, on Radio, etc.
If members of the public wish to become members of this site then that is their perogative, what they conclude from reading comments, updates, factual information etc that is available is something we as a Group have no control over.
As to your last sentence, I (although not on the IOM) would also like to hear your views, this group is also here to provide support for its members, as many will testify.


too far?

  • RWT
  • 10/10/08 01/12/09
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 19:52

I suggest you let your local MHK know your fears. It seems that the IOM Government are completely oblivious to the damage this affair is already doing to the financial services industry which employs over 60% of the working population. They say they want "to do what is best for the Isle of Man" and for depositors. Somehow they don't see how the two are related.

Oh and by the way, we haven't even started yet.


give us back our funds

  • German Mike
  • 13/10/08 31/05/09
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 19:37

What bloody planet are you on?

I've 40,000 Pounds down the IoM pan that it has taken me and mine a lifetime to put together.

Instead of peace in retirement we are worried sick by your uncaring banking system and uncaring Gevernment.

Yes I have other money on the IoM, and no, it won't be there by Tuesday next week.

Don't tell me who to blame - I already know. And I sincerely hope that every last penny deposited with your and every other bank is pulled out.

You elected your Government - you sort it!


No one wants

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 18:45

No one wants to see people in our situation but in order to avoid that they only have to look at Mr Aspens cosy reassuring speech to the Financial Industry to know what they have to do.

Its NOT the DAG who are going to take down the IOM banking industry its the IOMs cavalier way of referring to the uneducated consumers ( saps) who had no idea that putting money into a bank in the IOM was akin to backing a horse in the 3.30 at Kempton Park.

We are not putting anyone anywhere Mr Aspen and Mr brown can do that all by themselves.

BTW It might be a good idea to check out if the bank that you work in is a 'core' bank.


Objection to Aspden's Analysis

  • DXB
  • 12/10/08 31/05/09
  • unspecified
  • Offline
  • Thu, 12/02/2009 - 16:42

What abject nonsense! I am absolutely incensed by what Mr Aspden appears to be implying.

Someone please correct me if I'm wrong, but the interest rates offered by a deposit-taking institution do not have a direct correlation to the underlying credit risk of the institution.

The reality is a lot more complex. Very sound financial institutions might offer higher interest rates because they are new entrants to a market and are looking to build market share (e.g. ING's online accounts in the UK earlier in the decade). It is also worth bearing in mind the inflationary environment we were in last year. The 7% offered by KSF(IOM) wasn't significantly higher than the Bank of England's base rate (which was at or around 5% at the time, and facing upward pressure owing to surging energy and commodity prices), and was significantly lower than the 15% which KSF would have had to offer on krona deposits in Iceland last summer (did that imply that KSF(IOM) was lower risk than Kaupthing hf? - no).

Retail depositors aren't best placed to due diligence their bank's business model. It is the duty of the REGULATOR to do so, and to monitor the institutions it licenses in its jurisdiction. If the higher interest rates offered by KSF(IOM) entailed some sort of 'risk premium' - well, where was the regulatory health warning? What was the regulator doing to bring the higher risk profile to the attention of retail depositors?


@DXB

  • Hampnew
  • 22/01/09 31/05/09
  • not prepared to answer
  • Offline
  • Thu, 12/02/2009 - 16:55

The answer that is likely forthcoming to you comment is that Mr Aspden holds no professional qualification and therefore probably has an excuse. I understand that all other jurisdictions in the world demand that their regulator does hold a relevant professional qualification. His #2 and #3 are qualified accountants and would no doubt understand.


Target Aspden and the FSC for Legal Action

  • bdsa
  • 10/10/08 02/06/13
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 15:47

Looks Aspden has selected himself to be one of our first targets


Target Aspden and the FSC for Legal Action

  • Anonymous
  • Offline
  • Thu, 12/02/2009 - 18:18

You may well find that he is on his way out anyway.


Manx Herald Comments

  • Hoping and coping
  • 16/10/08 31/07/10
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 13:39

In response to my own question (below) - The following on the Manx Herald Home Page, so my comment has gone through (several times...). (So don't be put off, send in your comments.)

The Manx Herald apologizes to readers who may still be experiencing problems when trying to post comments at the end of our articles.

A technical fault has been identified which we hope to have fixed soon.

What should happen when you click on ‘submit’ is a message informing you that your comment has been sent for approval. Unfortunately, you will probably get an error message, which is likely to make you think you have incorrectly typed in the code; but this is not the case as comments are in fact being submitted and received.

We would also like to point out that it may be a few hours before the comment is read and approved, so please be patient if the comment doesn’t appear straight away.

Thank you for your interest in the Manx Herald and please keep sending your comments.


If only the IOM Government were as caring as its Press

  • Lucky Jim
  • 13/10/08 31/05/09
  • not a depositor
  • Offline
  • Thu, 12/02/2009 - 14:25

Congratulations to the Manx Herald for being so thoughtful & considerate to its readers. If only the IOM Government were the same with those who deposit with its Banks!


The role of banks, and their regulators

  • Hoping and coping
  • 16/10/08 31/07/10
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 15:26

Yes indeed. Perhaps they - and John Aspden - could read the following, taken from Professor Prem Sikka's Memorandum (TSC Banking Crisis Inquiry, Written Evidence, Part 2):

"Banks, as limited liability companies, are created [by?] the state and it has the ultimate moral and legal responsibility for their accountability and good conduct. Banks should be audited on a real-time basis directly by the regulators. Thus regulators will have timely information about any impending crisis."


Outraged and dismayed

  • Hoping and coping
  • 16/10/08 31/07/10
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 13:22

I've tried to put the following comment onto the Manx Herald page, but keep being told that I have the Captcha code wrong - I don't... Have others had problems? Any advice? (Is it too late? The article was published over a week ago...)

Shouldn’t banks act as financial stewards? We are indeed depositors, not investors. We placed our funds in KSFIOM for safekeeping, and safe return, trusting in the bank and the regulatory authority to take care of our monies. It now appears that we were naïve in the extreme. Rather, we should have expected that both bank and authority would play games with our life savings, while we should accept the outcome. I wonder if other depositors in banks on the Isle of Man realise that this is the deal.

We are outraged and dismayed by the sheer level of irresponsibility and washing of hands that has been and is being shown by all concerned.


May I say "Appalled"? I had

  • go mann
  • 10/10/08 31/05/09
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 13:14

May I say "Appalled"? I had a few other words on the tip of my tongue, but discretion overcame me.

  1. The Investor/Depositor comment is just so CRASS I cannot believe it emerged from the mouth of someone working in Finance. That is either a gaffe, or Mr Aspden is a complete idiot.

  2. If Mr Aspden is not an expert on the KSF issue by now, what in God's Name has he been doing for the last 4 1/2 months? Focussing hard on being a £200k p/a incompetent amateur?

OK, I've sat on many fences since this thing kicked off. I've tried to avoid invective, ad hominems and bickering. Not any more.

Mr Aspden, I think you are a complete, ignorant, two-faced to66er.
In years to come, the word "banker" will frequently be mis-typed, because of people like you.

... and .... breathe slowly


Enough evidence for a criminal investigation?

  • teedoff
  • 18/10/08 31/05/09
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 16:56

Whilst a public enquiry must surely be an outcome of this sorry saga, I am wondering if there are enough signs of a coverup and deceit to warrant bringing in the long arm of the law to review what actually went on?

Could perhaps one of our Manx-based investors approach their local constabulary regarding the theft / fraud? In reality, the Fraud squad would need to be involved.

I remain convinced there is a cover up.


Staggering

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 12:46

I am staggered.
I seems Mr Aspen is following the common trend of blaming the victim as a way of evading responsibility.


Protection of the few.

  • dclf1947
  • 10/10/08 31/08/09
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 12:09

He is probably taking this view as the deputy chairman of the FSC was a director of KSF IOM when it went into administration. To blame depositors is unbelievable from someone in his position. From recent statements from Mr. Brown and Mr. Aspden, reading between the lines, suggests that they are beginning to realise that the heat is being turned up and they could easily be accountable. It seems that self protection is foremost in their minds.


IOMG, IOM Hospice deposits

  • coldlightofday
  • 20/10/08 31/08/09
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 10:36

Who was responsible for placing IOMG funds (IoM taxpayers money) on deposit with KSFIOM?
Who was responsible for placing IOM Hospice funds (donations) on deposit with KSFIOM?

Do these responsible people agree with this opinion expressed by John Aspden?


Nod to get out

  • cypheath
  • 01/11/08 30/10/09
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 12:04

You would have thought they would have given the nod to their own to get out while the going was good.


Angry

  • RWT
  • 10/10/08 01/12/09
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 10:33

These comments by Aspden have made me so angry. Confusing the word depositors with investors clearly shows the man doesn't know his arse from his elbow. He is basically telling the world that depositing money on the Isle of Man is a risky investment. This needs to publicised widely to tell everyone who hasn't yet taken their money out of the Isle to do so asap. It's what he is recommending.


Very generous of him "banks

  • skintagainnow
  • 10/10/08 31/05/09
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 10:00

Very generous of him "banks should be allowed to fail, but not core banks"

Remind me - how many "core banks" are on the IoM??

Not much chance of them paying out much for that then.


The nitty-gritty of this should be in a DAG Press Release

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

Calling London team --
Certainly what Aspen has been saying is POWERFUL stuff for a DAG Press Release.
If you are busy & need some help with this I am willing to draft something...

I have sent a Comment in response to the Manx Herald


Bank failure and regulation

  • steveservaes
  • 13/10/08 31/05/09
  • unspecified
  • Offline
  • Thu, 12/02/2009 - 09:49

Whether banks should or should not be allowed to fail is one thing.
What is another thing is - should the FSC have allowed KSFIOM to continue sucking in deposits on the faith of a parental guarantee - when the FSC had already taken the view that the parent was possibly unlikely to pay its debts and had forbidden KSFIOM to send deposits to the parent for that very reason?
My own view is that a regulator should not allow a bank to advertise a parental guarantee in these circumstances. What does anyone else think?


If the FSC had sufficient

  • expatfrance1
  • 15/10/08 31/05/09
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 11:47

If the FSC had sufficient doubts about the parent bank meeting its financial oblications back in Spring 2008 that it felt it had to order KFSIOM to stop upstreaming its funds, then it must have known that any parental guarantee was also unlikey to be met if it was called upon.

In which case it should have ordered KSFIOM to remove the guarantee from all its literature.


Upstreaming Depositors Monies to KSF-UK

  • jamjar
  • 11/10/08 31/05/09
  • unspecified
  • Offline
  • Thu, 12/02/2009 - 15:17

Knowing what they did,and confirmed by lengthy discussions with FSA-UK,the IOM regulator should NOT have,either instructed,and/or agreed to transfer or upstream depositors monies to another Icelandic owned bank,ie KSF-UK,OR any other bank,but SHOULD have exercised/instructed all the due care and dilligence regulations on KSF-IOM,suspended its banking licence,and issued instructions to return all monies,to the depositors,fothwith.They did not need to do what they did,they made the WRONG descision,in their interests,and more importantly,all the depositors hard earnt interests.They are responsible for their actions,as Tony Brown has so clearly pointed out to EVERYBODY,now is the time to make the correct descision,and refund those monies,they simply moved off the island,IOM that is,that THEY gave away so easily.


my point entirely

  • steveservaes
  • 13/10/08 31/05/09
  • unspecified
  • Offline
  • Thu, 12/02/2009 - 11:57

surely the IOM FSC must have all sorts of regulations preventing misleading advertising of financial services. Surely one of them says "thou shalt not induce deposits by means of guarantees from persons the FSC has decided is suspect"? Surely? I for one was persuaded to deposit spondoolies by this very representation. Has the FSC failed to enforce its own reggies on this very matter - hence plunging KSFIOM depositors into the black cave of endless night?


More good evidence -- is someone making notes?

  • Lucky Jim
  • 13/10/08 31/05/09
  • not a depositor
  • Offline
  • Thu, 12/02/2009 - 11:38

I trust (nice word that!) someone in the London Team is making notes of all these pearls of evidence ( :


Bank Failure

  • shafted
  • 10/10/08 12/12/09
  • a depositor
  • Offline
  • Thu, 12/02/2009 - 10:34

I agree that in my case i deposited mid September 08 on the strength of the advertised guarentee, when in fact the s--t was already hitting the fan, ie they took my money knowing it was in danger.


I had an e-mail 5 days B4 the bank collapsed

  • Lucky Jim
  • 13/10/08 31/05/09
  • not a depositor
  • Offline
  • Thu, 12/02/2009 - 11:32

I received an e-mail the week the bank lost its licence
asking me to deposit £75,000 or my account would be closed!