KSF Megathread 2

[bellyup]

I have for many years as an expat maintained a bank account in the IOM with the Derbyshire Building Society .

 

Which you knew was an offshore account? So you knew it was only covered by the 15k dps at the time?

 

 

 

Please see my post on the Nationwide BS .

At the time the Derbyshire BS was fully backed up by its parent bank in the UK.

[bellyup]

I've said before in these interminable complaint threads that I genuinely feel sorry for Bellyup and anyone who has lost money they thought was secure, but like most posters I find his/her insults to the Isle of Man (rather than the UK or Iceland) tiresome and counter productive. I'm no expert in the ins and outs of the KSF collapse, but it seems that most people are getting their money back (eventually) and that IOMG acted very decently in sorting out the smaller investors so quickly. I've been shafted a few times over the years by people I thought I could trust, so I quite understand the desire to extract a pound of flesh.

 

Stu I did not come on to insult the IOM as I explained the MF only came to my attention because of the unfortunate comments directed at the innocent depositors on this site. As you can see they continue but as someone on another thread noted it may be only the 'social detritus'. Even so it wrong that the depositors have been given further insult to injury I can only imagine its a sad fact of human nature - kicking someone when they are already down.

Believe me the depositors have written innumerable letter to iceland and the UK government it an ongoing and tedious procedure.

 

Maybe someone can tell me - where did all the money end up? It didn't just disappear - someone has it, and clearly it's not the Isle of Man (if it were, Bellyup would have a very real reason to attack us). I'm an admitted thicko at economics - I also don't understand where all the money ended up in the banks bail-out. I know that sub-prime mortgages were the root of the problem, but that property portfolio (assuming the loans were secured against the property) didn't become totally worthless the day the mortgages were taken out - most will have been paid off to an extent and the land must still have a value?

 

There was a certain amount in cash in the bank- there still is but there are law suits pending - many of the depositors had transferred their accounts but they were sent back to the IOM . This in fact - although legal- seems like robbery to me. To date all these people have lost their cases but if they win on appeal they will have to be paid first so the liquidator has put funds aside for this.

The Loan Book accounts for a lot of the money and it seems touch wood OK with good projections for 2011 and 2012.The rest will be paid out by 2017 but it wont be very much as most will be paid back during the years mentioned.

It seems that there were big loans to wealthy people for various reasons. High Worth Individuals as the MD called them.

The main big question mark is the large amount of money frozen in KSFUK. It was not ring fenced and has disappeared in the liquidation process of KSFUK. we are just one of many depositors and have not -despite the large amount involved been given any representation on the KSFUK creditors committee. I dont understand why this is so ( the cats home did better than us)

I think that this money should have been returned to the IOM and that the IOMG could make/have made greater efforts with the UK government in this department.

 

Of course the Liquidators themselves are very expensive and have to paid out out by the depositors.

 

I have no doubt that there is far more to this than meets the eye.

IMO The UK government acted disgracefully and has caused anguish to those very citizens who are least trouble to them - people who had made provision for themselves.

 

There are other investigations under way

eg

http://www.guardian.co.uk/business/2010/jun/06/kaupthing-deutsch-bank-iceland

 

If it can be proven that this these institutions have acted in a manner that is rather less than kosher the depositors may be able to get some restitution.However I and no one else has any experience in bank collapse and must depend on the liquidators to do their best for us.

KSF is also quite an unusual case for liquidation as it was a sound bank with considerable assets.

 

Bellyup, I've had numerous emails from disgruntled KSF customers since the collapse, but they're usually such general rants that they're of little use, except in possibly giving me background questions to ask in interviews. Once the inquiry findings are made public they'll be covered in full, and anyone affected will be given a right to reply. Email me at work with your details and do my best to give you your day in the sun.

 

Thank you very Much

[When Skies Are Grey]

If I wanted a rational argument i wouldn't come on the MF looking for one.

 

Here endeth the lesson.....

[John Wright]

But the net sum of money on deposit with KSF London has been agreed by the London liquidators to be repaid

 

The fact is simple. KSF IOM had to close its doors when its Icelandic parent went under, that seems to have been caused by a spat between the Iceland and UK governments and precipitate action by the UK Government.

 

IOM was never actually insolvent in that it had more assets than liabilities ie the amount owed to it and reserves and capital exceeded the sums owed to depositors, but it was not liquid, it was invested via the loan book and the London deposit, so it could not pay back depositors who sought to withdraw funds as and when. It had to close.

 

Since then the loan book (which was almost fully secured and secured on property with a wide margin of security, ie excess of value over loan)has operated with almost no default and will all be paid back within 6 years of the bank closing its doors. If the loan book had been sold then it would have only realisd 50% in the then market conditions and saving the bank was a no brainer whilst the London position was unclear. But even London was not insolvent, as I understand it. The UK government just adopted a strange way of protecting account customers and placing itself as the main and priority creditor and in the process shafted the depositors in KSFIOM and the Icelandic bank, which would have probably survived.

 

As for those who are claiming now on the non completed withdrawals and transfers which had left KSFIOM, but not reached other banks as cleared funds, because there weren't funds to clear and so were recalled, if they stopped their claims and appeals the liquidator would be able to pay out everyone a more substantial interim, so its one set of creditors causing hardship to another with liquidator in the middle

 

I still predict a near to 100 pence in pound pay out, maybe a surplus to pay some interest, by 2015, based on current information and IOM Government will get most if not all its DPC money back as well

[entj]

If the Bank of Ireland went tits up, up to 50K sterling of a deposit would be guaranteed by HM Govt if the deposit was made via UK Post Office account. This would be a payment made via the UK's equivalent of the IOM's DCS. Any amount above that is guaranteed 100% by the Bank Of Ireland (who run the Savings accounts at the PO). In the event they are unable to honour this, then Irish Government steps into their shoes. That's 100% guarantee of funds, but no guarantee how long it will take them to pay out that guarantee (1 year, 5 years, 100 years ??).

 

Best close your a/c with BOI then.

 

Exactly.

 

If I do not, I accept the risk.

 

I may even accept this risk because I think all banks in the world are safe and the impossible will never happen.

 

I may balance this risk if the Post Office paid the best interest rates available to me and, given my own particular circumstances, offered the most convenient way of banking.

[manx-person]

 

IOM was never actually insolvent in that it had more assets than liabilities ie the amount owed to it and reserves and capital exceeded the sums owed to depositors, but it was not liquid, it was invested via the loan book and the London deposit, so it could not pay back depositors who sought to withdraw funds as and when. It had to close.

 

 

KSF IoM was insolvent, it was unable to meet its liabilities as they fell due. There are two 'tests for insolvency' the balance sheet test and the cashflow test.

 

To claim that KSFIOM was never actually insolvent is grossly misleading, it was unable to meet its obligations as they fell due. It was insolvent.

[John Wright]

and that, paraphrased, is exactly what I say in my post. You use the legal terminology, I was using laymans language to explain the actual position and its implications. My post is not misleading at all. It was solvent on the balance sheet test but not on the "as they fall due test" so it had to close.

 

 

IOM was never actually insolvent in that it had more assets than liabilities ie the amount owed to it and reserves and capital exceeded the sums owed to depositors, but it was not liquid, it was invested via the loan book and the London deposit, so it could not pay back depositors who sought to withdraw funds as and when. It had to close.

 

 

KSF IoM was insolvent, it was unable to meet its liabilities as they fell due. There are two 'tests for insolvency' the balance sheet test and the cashflow test.

 

To claim that KSFIOM was never actually insolvent is grossly misleading, it was unable to meet its obligations as they fell due. It was insolvent.

[jimbms]

Just out of interest bellyache, where exactly do you bank now?

[manx-person]

and that, paraphrased, is exactly what I say in my post. You use the legal terminology, I was using laymans language to explain the actual position and its implications. My post is not misleading at all. It was solvent on the balance sheet test but not on the "as they fall due test" so it had to close.

 

IOM was never actually insolvent in that it had more assets than liabilities ie the amount owed to it and reserves and capital exceeded the sums owed to depositors, but it was not liquid, it was invested via the loan book and the London deposit, so it could not pay back depositors who sought to withdraw funds as and when. It had to close.

 

 

KSF IoM was insolvent, it was unable to meet its liabilities as they fell due. There are two 'tests for insolvency' the balance sheet test and the cashflow test.

 

To claim that KSFIOM was never actually insolvent is grossly misleading, it was unable to meet its obligations as they fell due. It was insolvent.

 

With respect John, thats not what you said.

 

You said it "was never actually insolvent" - I say it was.

 

Imagine the Examiner headline - prominent Manx advocate states KSF IOM "was never actually insolvent" !!!

[John Wright]

selective quotation, the next words " in that it had more assets than liabilities ie the amount owed to it and reserves and capital exceeded the sums owed to depositors" go on to define in what sense it was solvent and then the words "but it was not liquid, it was invested via the loan book and the London deposit, so it could not pay back depositors who sought to withdraw funds as and when. It had to close" define how it was insolvent. What I posted is completely true and identical to what you say in its meaning and sense

[bellyup]

and that, paraphrased, is exactly what I say in my post. You use the legal terminology, I was using laymans language to explain the actual position and its implications. My post is not misleading at all. It was solvent on the balance sheet test but not on the "as they fall due test" so it had to close.

 

IOM was never actually insolvent in that it had more assets than liabilities ie the amount owed to it and reserves and capital exceeded the sums owed to depositors, but it was not liquid, it was invested via the loan book and the London deposit, so it could not pay back depositors who sought to withdraw funds as and when. It had to close.

 

 

KSF IoM was insolvent, it was unable to meet its liabilities as they fell due. There are two 'tests for insolvency' the balance sheet test and the cashflow test.

 

To claim that KSFIOM was never actually insolvent is grossly misleading, it was unable to meet its obligations as they fell due. It was insolvent.

 

With respect John, thats not what you said.

 

You said it "was never actually insolvent" - I say it was.

 

Imagine the Examiner headline - prominent Manx advocate states KSF IOM "was never actually insolvent" !!!

 

 

Well it wasn't technically - all banks have money in operation and cannot at the drop of a hat repay all their depositors at the same time else it would cause a run on the bank.

 

This is exactly what the actions of HMG in the person of Alastair Darling did he precipitated a run on the bank .

Freezing the banks assets in the KSFUK made the bank unable to meet its obligations but the assets were there.

 

These assets are I understand still in dispute the KSFUK liquidators Ernst and Young

have decided that they amount to 205 million . The Liquidators for KSFIOM believe that it should be more.(£231.4m.)

 

Anyway as John Wright has said at the end of the day the IOM will have lost nothing.

The liquidators will have made a lot of money .

Most of the bank staff have retained their jobs .

Its only the depositors that have suffered and will continue to do so for some years.

[jimbms]

Well it wasn't technically - all banks have money in operation and cannot at the drop of a hat repay all their depositors at the same time else it would cause a run on the bank.

 

This is exactly what the actions of HMG in the person of Alastair Darling did he precipitated a run on the bank .

Freezing the banks assets in the KSFUK made the bank unable to meet its obligations but the assets were there.

At last you admit it was not the fault of the IoM Govt that KSF went under and that all banks are not 100% secure

BTW you neve answered my last question

[bellyup]

Well it wasn't technically - all banks have money in operation and cannot at the drop of a hat repay all their depositors at the same time else it would cause a run on the bank.

 

This is exactly what the actions of HMG in the person of Alastair Darling did he precipitated a run on the bank .

Freezing the banks assets in the KSFUK made the bank unable to meet its obligations but the assets were there.

At last you admit it was not the fault of the IoM Govt that KSF went under and that all banks are not 100% secure

BTW you neve answered my last question

 

I have never said it was ALL the fault of the IOMG it was IMO the fault of three governments however the IOM doesnt get away scott free its regulator was sloppy and its handling of the fallout abysmal

 

I do not answer questions posed in a rude and ignorant manner.

[jimbms]

I do not answer questions posed in a rude and ignorant manner.

OK I will rephrase.

Could you out of interest please inform us all where you bank now, considering you deem the Isle of Man as insecure, I would be interested to know which country you see as safe for banking?

[bellyup]

Two countries that I consider safe to bank in today are Canada and Australia.