James Daley, a columnist with The Independent in the UK wrote an article on Saturday asking who is to blame for the Icelandic banks’ collapse, Iceland’s vidskiptabladid reports.
Daley explains how he first felt proud with the British government’s actions to seize the assets of Icelandic banks in the UK and protect British citizens, as he believed, at the time, that the Icelanders had no intention of honouring their responsibility toward British savers.
As further information became available, the less proud he felt, and he has now come to the conclusion that London probably contributed more to the collapse of the banks than was necessary.
Daley makes special mention of savers with Icelandic bank branches in the Channel Islands and the Isle of Man, where the respective governments are not planning to reimburse savers their lost money.
Daley states that the UK government would be quite right not to insure money held by British citizens in countries other than the UK (IoM and the Channel Islands are self-governing Crown Dependencies, not actually part of the United Kingdom). But, he goes on to reason that the British government should refund the offshore savers, if it comes to light in a more concrete way that the British government contributed to the banks’ collapse.
They are doing the same bit to others they thought they were preventing Iceland from doing…
Link here:
http://www.independent.co.uk/money/invest-save/james-daley-whos-to-blame-for-the-icelandic-banking-mess-972694.html
Arguably worth reading for those choosing to see past the usual distortion and “spin” from New Labour, since it repeats one interesting question (about the wisdom of provoking/exacerbating a crisis in someone else’s banks when *everyone* will end up paying for the consequences, anyway) and raises another (about the bizarre status of the various Crown territories).
Subject: The Darling Tapes, blunder, Intrenational chaos KSF IOM DEPOSITORS ACTION
A LETTER TO THE UK AUTHORITIES
Dear Sir
You are aware that as a result of your noble action to safeguard British depositors in the UK, assets accrued from the 7000 plus international British depositors from KSF IOM , deposits amounting to 600 mil. Pounds are being retained in the UK, with obvious plans to distribute it to the unfortunate British depositors of KSF UK. Hereby ignoring and abandoning the British depositors of IOM to their fate.
Adapting the easy out option, simply stating that the UK is not responsible for IOM affairs. IGNORING the FACT that the UK WAS responsible for the dilemma, not only that of IOM depositors, but also the downfall of Iceland.
(“Acting on the advice of the Bank and FSA, in the light of announcements made by the Icelandic authorities in recent days…”) See your quote below.
Please explain what announcements made by the Icelandic authorities you are referring to here.
The only dialogue I am aware of is the telephone conversation between Darling and Mathieson, where Mathieson explicitly iterates that Iceland will honor its parental guarantee to all depositors, regardless of race, nationality, local or international…. unlike the guarantee of the UK limited merely to it’s UK depositors, not even including the international UK depositors, let alone other nationalities.
Yes Iceland was in difficulties and was trying to explain this all along. AND NO Iceland is not a terrorist country, it’s one of your fellow European nations, allbeight small, hardly a reason to knock it out.
Not once did the Icelandic authorities denied their legal liabilities. Refer to the Darling tapes.
After this telephone conversation, the very next day, the PM Gordon Brown froze all Icelandic assets in the UK using his terrorist act as justification to do so…(there-by implying that the Icelandic government supports terrorist activities as well as us, the international British depositors) …the Chancellor exercised it’s authority, resulting in international chaos.
THIS Sir, is nothing but a big blunder on the part of our leaders, take care that it does not escalate into a scandal of epic proportions.
Sir, we have had enough, and we are not going to let one stone unturned in the fight to get our money back, money that was earned the hard and long way, our life earnings, money we saved for our children, money that was already taxed as we are ALL tax payers, money that we saved for our old days in order not to be a burden on society, OUR money that YOU have.
Please answer what the KSF UK Liquidator is hiding with the sealed court papers, why the confidential court proceedings? Why are the court papers sealed? Who had the papers sealed? These are some of the questions that springs to mind from our fellow depositors. I am sure if made public awareness, the media and public would also like to know.
We will not stand to be victims of political blunders committed by our leaders, we will hold them responsible for their actions.
Sir, I hereby IMPLORE you to take this message serious, as it is written for and on behalf of my 8000 friends and fellow depositors.
We would like you to take this further and we need an answer back as to what your intentions are with our money.
We simply need you to release our money and return it to it’s rightful owners.
As you know, the court on IOM ruled that it is most feasible not to liquidate KSF IOM, and an extension of 28 days was granted.
Awaiting your soonest reply.
Depositor KSF IOM
CV Kent
08 October 2008
Kaupthing Singer & Friedlander
1. Acting on the advice of the Bank and FSA, and in light of announcements made by the Icelandic authorities in recent days, the Chancellor has taken action today to protect the retail depositors in Kaupthing Singer & Friedlander, a UK-based banking subsidiary of Kaupthing Bank. He has taken this action to ensure the stability of the UK financial system. Savers’ money is safe and secure.
2. Kaupthing Singer & Friedlander (KSF) is regulated by the FSA. The FSA has determined that Kaupthing Singer & Friedlander no longer meets its threshold conditions, and is likely to be unable to continue to meet its obligations to depositors. The FSA concluded that KSF is in default for the purposes of the Financial Services Compensation Scheme. The Treasury has used the Banking (Special Provisions) Act 2008 to ensure a resolution that preserves financial stability and provides protection and continuity of business for depositors.
3. KSF’s Kaupthing Edge deposit business has been transferred to ING Direct, a wholly-owned subsidiary of ING Group, which operates through its branch in the UK. ING Direct is working to rapidly ensure that it is business as normal for all customers.
4. This action by the Tripartite Authorities protects savers’ money and provides certainty for retail depositors. The transfer of the retail deposit books has been backed by cash from HM Treasury and the Financial Services Compensation Scheme.
5. The remainder of Kaupthing Singer & Friedlander business has been put into administration. Any retail depositors eligible to claim under the Financial Services Compensation Scheme whose business has not been transferred to ING Direct will be paid out in full through the Financial Services Compensation Scheme.
6. This is the right course of action to protect savers, ensure financial stability, and safeguard the interests of the taxpayer.
I thought I was safe with the good old steady Derbyshire. It is a disgrace that we who were long standing depositers in that Building Society have been duped and robbed by KSF/UK Gov’s shenanigans.
As Kent states my deposit was accrued slowly and prudently for old age. What did I DO WRONG?
Unfortunately, like all of us, you didn’t assign a high enough risk to the possibility of banks failing. If you had then you’d have been very interested in what would happen if they did start to go under.
Dear confused from Kent
Interesting letter.
“deposits amounting to 600 mil Pounds are being retained in the UK, with obvious plans to distribute it to the unfortunate British depositors of KSF UK”
- I believe that this would be illegal, the assets of a liquidated company cannot be distributed at will by the UK government.
“UK WAS responsible for the dilemma, not only that of IOM depositors, but also the downfall of Iceland”
- and no doubt global warming, the sub-prime mortgage crisis and UFO abductions. Maybe you looked at a different phone call transcript, the one I saw made it very clear that Iceland was only prepared to guarentee domestic deposits, and interntional deposit protction was dependent on liquidating assets that he admitted would not cover international liabilities.
Investing offshore may offer tax advantages and good interest rates, but presumably when you invested you were aware it was not part of the UK, and hence that you were outide the protection of HMG.
Much as I sympathise with your plight, I fail to see any reason why you should be reimbursed for this any more than someone who has lost 50% of the value of the share portfolio/pension fund. This is a time of financial crisis, and inevitably some of those with riskier invesment strategies have been caught up in it.
Björgólfsson suggested in the Kompás interview that the Central Bank’s refusal to grant Landsbanki the GBP 200 million loan, which would have allowed them to accept the British FSA’s offer, might have caused the anger of British authorities and the harsh measures undertaken to seize assets of the Icelandic banks in the UK. Some believe these measures led to the downfall of Kaupthing Bank.
In Björgólfsson’s opinion, the Central Bank could have prevented the uncertainty surrounding the Icesave deposits in the UK and the subsequent dispute between Iceland and Britain, which has caused considerable damage to Iceland’s reputation, Fréttabladid reports.
ITS EASY TO BLAME OTHERS – WHAT ABOUT BRITISH SAVERS WHO HAVE LOST £BILLIONS BECAUSE OF ICELAND
Hi,
I’m a producer working for Channel 4 news. We would like to do a TV interview this afternoon with someone who had savings of over 50,000 pounds with KSFIOM – and who lives within a few hours of London. It’d would make up part of a news item looking at the situation in which you find yourselves – and exactly what is being done about it.
Please email me on joanna.blundell@itn.co.uk.
Many thanks in advance,
Joanna
Can anyone shed light on/explain the fact that the HM Gov’s “represents” the I of M in international affairs? It states in the latest KSF’s bulletin that the UK Treasury is representing the I of Man Treasury in discussions with Kaupthing ((Iceland).
Sure. The IoM is a funny place, politically. Whilst it’s not a part of the UK, they are British. If that’s clear then consider that, unlike other Brits, their not members of EU.
Basically it’s a screwed up feudal arrangement that should have been simplified ages ago but which never has been. The UK is a screwy place like that (the Channel Islands are in pretty much the same situation as the IoM), which causes no end of bother with Scotland and, to a much lesser extent, Wales and Cornwall.
Anyway, short story is that the IoM is smaller than Iceland even (!), so it makes sense for the UK to handle any Foreign Office type stuff.