When will TSC produce its final report?

  • investor01
  • 13/10/08 n/a (free)
  • a depositor
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Posted: Wed, 25/02/2009 - 21:33

As with some others out there, I feel our best chance of recovering anything meaningful from this fiasco is if the TSC concludes that wrong-doing is in evidence and the FSA or HMG itself is forced to step in to save face.

With that in mind, does anyone out there know when the TSC is scheduled to produce its final report into the banking crisis? I am aware that a report does not necessarily precipitate swift action but having their conclusion in print can only help our cause.


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My understanding of the TSC evidence

  • steveservaes
  • 13/10/08 31/05/09
  • unspecified
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  • Fri, 27/02/2009 - 13:49
  1. None of the IOM FSC bods can ever have been under the impression the 550m was in any way safeguarded or ring-fenced - they are shrewd people and would have had no reason at all to think this
  2. The IOM FSC bods checked what the liquidity requirements for KSFUK were - that is the liquidity requirements that were imposed as preconditions IF KSFUK was to continue its banking business
  3. Those liquidity requirements - as the FSC bods would know - are of no comfort in a meltdown situation where the bank is effectively going out of business because of a run on it
  4. Presumably it would be absolutely forbidden under the relevant UK legislation (terror and re banking) to tip-off someone else, even another regulator, or something that would occur naturally, that an emergency situation was occurring that meant KSFUK was effectively going out of business (so the liquidity requirements for it to be in business would be irrelevant and of course no safeguard)
  5. Accordingly all this bleating by FSC about the FSA is a smokescreen: basically the directors/FSC were taking a decision to stick all the cash in one bank meaning (to their knowledge) 100% exposure to any risk of a run on KSFUK, instead of spreading it about - there was no probably no real culpability of the FSA
  6. I think then that the FSC have been culpable in 2 senses: (i) allowing the 550m deposit knowing full well it ws not ringfenced and would have no priority status if KSFUK went down (necessarily taking KSFIOM with it); and (ii) allowing KSFIOM to suck us in with a PG from a Bank who had effectively been deemed dodgy some months beforehand by FSC
    This was my first reaction at the time.
    The lesson for IOM here/ the FSC must be not to allow any bank to operate in IOM unless it is an offshore part of a systemically-important bank in a major nation, meaning upstreaming is not a problem.
    To allow a bank from a non-major nation with financial difficulties to set up and then fail to diversify its asset base outside the group was an error on many levels. Perhaps the lure of more income was just too much.

FSC culpable in more than 2 ways

  • Dave1
  • 10/10/08 31/05/09
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  • Fri, 27/02/2009 - 16:29

Agree totally with your analysis.
But I would also add the FSC have much to answer for allowing KSFIOM bank directors to hold (very senior) positions in the FSC at the same time

Treasury Select Committee Report

  • investor01
  • 13/10/08 n/a (free)
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  • Sat, 21/03/2009 - 20:10

I have managed to answer my own question.

I received a letter today from the Treasury Committee stating "The Committee is hoping to report on this inquiry in early April."

I have to say, one thing that has impressed me and lifted my spirits in this whole nightmare is the professionalism of the TSC. I have written countless letters and the only response, other than from my own MP has been from the TSC. The letter I have just received individually acknowledged all of my letters sent and also stated "The Chairman and Committee are always interested to hear individual views and experiences, which go some way to informing them when they are interrogating the witnesses they have before them."

Whatever your views on all this, I'm sure you'll agree that the TSC have been an objective constant.