Bell backing KSF payment scheme

The government has been asked to approve �180m for the scheme

A scheme of arrangement to compensate savers in a collapsed Isle of Man bank is the best response to the "complex issue", the treasury minister says.

Allan Bell is asking Tynwald to approve the transfer of £180m from government reserves to fund the Kaupthing, Singer and Friedlander (KSF) scheme.

It would make scheduled payments to depositors, subject to approval by creditors and the High Court.

The treasury believes the scheme offers a better outcome than a liquidation.

Some 10,000 people had money deposited in KSF Isle of Man (KSFIoM), a Manx subsidiary of Iceland's collapsed Kaupthing bank, when it went into provisional liquidation in October.

The Manx government is to underpin the compensation scheme, which will also be funded by the banking sector and from recovered assets.

I'm very confident we will have all the banks signed up in good time for the scheme of arrangement, should it get court approval on 9 April Allan Bell

It estimates 54% of depositors would get back all of their funds within three months, while 71% would be fully refunded within two years.

Mr Bell is asking for £180m to meet anticipated expenditure on the scheme, but he expects about £100m of that money to be recovered by the government.

A further £30m will be recovered by levies placed on banks taking part, Tynwald will be told.

"We are in discussion with the bankers at the moment and progress is very good," Mr Bell said.

"I'm very confident we will have all the banks signed up in good time for the scheme of arrangement, should it get court approval on 9 April."

Mr Bell has described the KSF collapse as a "very complex and complicated issue".

"It's complicated by the fact it's linked to Iceland and the collapse of the Icelandic economy.

"It's massively complicated because of the links to the United Kingdom and the fact that £550m of our money is trapped there."

E-mail this to a friend

Printable version