Manx Herald Isle of Man: Call to ‘nationalize’ KSF IOM

Call to ‘nationalize’ KSF IOM
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Herald Editor on 13 February, 2009 06:44:00
 
The Manx Herald has received copies of many emails, sent to the Isle of Man
authorities and politicians, in which desperate sounding ‘depositors’ of,
the virtually collapsed, Kaupthing Singer & Friedlander (IOM) bank implore them
to see that their money is returned.
Some of the emails are more emotive than others, and some make all kinds of
allegations about the regulators, the UK & IOM governments and sundry other
parties - some of which are probably quite valid.
While most explain how the situation has affected them, and why they think they
should have all their money returned - which is understandable - not all of them
suggest how they think this could be achieved.
A few suggest that the IOM Government should borrow money from the UK Government
to help raise the money to repay depositors. This is perhaps not such a bizarre
idea, given that it is not far removed from the Chief Minister, Tony Brown’s
own initial thoughts - but now apparently a taboo subject - that if Kaupthing
Hf/Icelandic authorities wouldn’t honour the parental ‘guarantee’ he would
be looking to the UK to cough up.
However, one suggestion fast coming up on the rails is nationalization of KSF
(IOM).
As it happens, the Manx Herald - noting this option didn’t appear to have been
considered, or at least openly - ‘ran it past’ the Government’s own PR
‘spin doctor’, at the last KSF (IOM) court hearing, to see what, if any,
reaction it produced. It produced none.
Given controversial comments elsewhere - about whether banks should be allowed
to fail - and the Treasury’s apparent support for an orderly winding down;
then the chances of nationalization are perhaps as likely as finding an
Englishman who has beaten a Norwegian in a race to the South Pole.
However, given that the IOM Bank is now nearly three quarters owned by the UK
Government, perhaps it is not such a totally ‘off-the-wall’ idea; and it
could at least ensure there is one bank left in the IOM if Michael Foot,
Alistair Darling et al deliver, to ‘off-shore banking’, the
‘coup-de-grace’ anticipated by some observers.
Meanwhile, the Treasury has been hastily preparing their affidavit evidence in
support of the proposed ‘scheme of arrangement’ (SOA); although not hastily
enough to meet yesterday’s (Thursday 12th Feb) deadline set by Deputy Deemster
Corlett. The Manx Herald was assured this morning, by Gough & Co, they would be
filed and served before the end of the day; but we are sure this ‘failure’,
to meet the deadline, will create a bit of a stir on the 19th February, the date
of the next hearing. Whether the contents of this affidavit will be sufficient
to persuade the court to allow more time for a SOA to work remains to be seen;
but one thing is for sure, the longer it takes to sort this affair out the more
time there is for the reputation of the Island to suffer damage (in some eyes).