Isle of Man - Special Report

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Special Report on the Isle of Man

Dealing with a global financial crisis is testing enough for any government whose bread and butter industry is financial services, but throw in the collapse of a bank on your home turf - now that’s a proper crisis.

We are, of course, referring to the Isle of Man and in this special report we look at what, two years down the line, has been done to help Kaupthing Singer & Friedlander (IOM) depositors retrieve their savings.

Our exclusive film interview with John Aspden, Chief Executive of the Isle of Man’s Financial Supervision Commission talks about how over 95% of qualifying depositors have been paid their compensation and what hopes remain for those whose deposits were over the compensation limit. In two separate films, Aspden talks about hopes for bondholders who held money indirectly in the bank and what lessons can be learned from a bank collapse.

In terms of depositor protection going forward, the Isle of Man has proved its scheme can work, so much so that both Jersey and Guernsey have now introduced similar schemes. It also appears that canny expats are now exercising a more cautious approach in terms of where you're placing your saving pots. Many of the Isle of Man providers ExpatMoneyChannel spoke to say they are getting asked more questions from clients about the financial stability and parent strength of their institution. When it comes to products and services, expats are being equally as cautious with many keeping a close and wary eye on rates offered.

Luckily, products available in the Isle of Man include a good selection of both fixed term, variable rate, instant access and notice accounts as well as banking and investment services. We spoke to a range of providers to find out what is currently popular, as well as highlighting some likely product trends in the future. 

We have also delved into other product areas available in the Isle of Man that expats may find useful. These include offshore trusts and Qualified Recognised Overseas Pension Schemes (QROPS).

Special Report on Isle of Man

Submitted by Anonymous on Thu, 01/07/2010 - 14:52.

Having just read your article above I believe there are a few IOM PR issues that need resolving.
1. The IOM DCS was increased the day after KSFIOM was put into provisional liquidation - coincidental?
2. The IOM could have triggered its DCS in Oct 2008, but instead tried to impose a Scheme of Arrangement on depositors, which was voted down in May 2009. Legal costs for this have been pushed back onto depositors by the IOM legal system.
3. The IOM DCS (stated by the then Minister for IOM Treasury Mr Bell) as being "much vaunted" was activated eventually in June 2009. This meant that depositors were denied access to any money for 8 months.
4. Perhaps 95% of those that did claim under DCS have been paid, as at July 2010 the exact figures are unknown, but it still leaves approximately 30%+ of the depositors awaiting the liquidation returns, which to date have been 40% and that their best figures show a possible 85% by 2017.
5. Nearly 2 years after the collapse of KSFIOM the exact state of the bank as at Oct 2008, the number of accounts held, the number paid out under DCS are all still unkown.
6. KSFIOM was an IOM regulated and licensed bank on IOM under FSC regulation. It was a direct subsidiary of an Icelandic bank. It also had a Parental Guarantee that is presently in dispute over its legitimacy. What has the FSC done to help depositors - it has blamed the UK Government.