Landsbanki customers angry as scheme will not involve them
Saturday 22nd November 2008, 9:24AM GMT.
LANDSBANKI customers have said that the proposed depositor compensation scheme should have been put in place years ago.
Landsbanki Guernsey Depositors’ Action Group committee member Dave Grundy said he felt angry and bewildered to know that the recently announced scheme, that could be ready for approval next week, would not help him or his associates.
‘Requests for a scheme have been made for years and years but it has taken the Landsbanki crisis to wake them up and get them to shut the stable door,’ he said.
‘Whatever they do bring in with this scheme I am sure will include steps to ensure that the victims of the Landsbanki Guernsey collapse do not benefit.’
The scheme, which will compensate savers if a bank collapses in future, will not be applied retrospectively.
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Guernsey finance has had it so easy for so long they thought they were imune to reality !
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Yes – certainly a case of ‘shutting the stable door, quite shameful really. In any event who would want to deposit in Guernsey any more after this debacle?
Do the decent thing Mr Trott and play fair towards all the very aggrieved people worldwide who have lost their savings on your little rock and restore a modicum of faith in the goodwill of your government.
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Tuff cookies to whoever lost there money, they knew there was no protection, and if they didn’t that should have asked.
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Josh – we did ask and were assured that there was a parental guarantee given by the parent bank, which they have reneged on.
The GFSC should never have allowed this bank to operate on the Island.
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Josh
“Tough cookies,” you say??? Many of us desposited our savings in a safe UK building society, the Cheshire.
How could we ever have imagined that the GFSC would permit the sale of our savings to an Icelandic bank that we’d never heard of?
Or that the GFSC would permit Landsbanki to operate in Guernsey with no staff (it outsourced customer services to Butterfield Bank, as it later transpired).
But one thing is for sure: we should all have closed our accounts the moment we learnt that the GFSC had permitted the sale of our savings to a hitherto-unknown Icelandic bank.
That was the big error we made.
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Compose – the promise was to suppost Landsbanki Guernsey if it got into difficulties. And Iceland added further assurances to back them up. It was the parent company and the whole Icelandic economy that collapsed. Its not as if they are deliberately witholding your money – they don’t have it to give to you.
Yes a compensation scheme sounds great, but it is as limited as a Government guarantee ( just look at Iceland ). So far the British government has bailed out any failing UK banks – they can’t do that indefinitely. If a significant number of banks fail no compensation scheme could cope. In the UK it is the depositors in the Banks that fail first that seem to be best off, since they are getting all their money back. If many more banks fail people will only get back the guaranteed amount, and eventually if things get really bad those left will get nothing.
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The issue the States can’t avoid is this:
It was NOT this particular bank which was the problem (since the time LG went into Administration it had 22m **surplus** of assets over liabilities).
It is simply that due to the credit crunch LG is unable to repay depositors upon demand due to much of the money being in UK property, and one significant deposit tied up in the Heritable Bank (a UK bank, owned by Landsbanki Iceland) which provoked the administration.
Suggesting that Guernsey people shouldn’t trust Guernsey banks which are owned by overseas institutions (as seems to be the thinking of a number of people recently) simply aren’t relevant.
It was a global banking crisis which Guernsey has shown itself as ill-equipped to handle as Iceland itself was.
If the States bungle this (they show every prospect of doing exactly that!), it’s not so much racist jokes they will have to worry about — the finance industry will now start slowly to die.
Wholesale AND retail.
Wholesale depositors won’t trust a jurisdiction where retail depositors aren’t safe (despite the egregious optimism of the Treasury Minister).
When Kaupthing (IoM) went into liquidation the day after Landsbanki Guernsey, Tynwald pledged to support the depositors up to a staggering 150million from the Manx Government’s contingency fund.
In doing so, they had the scale of the problem, and their Islands reputation firmly in mind.
The Manx First Minister has been extremely active nationally and internationally in supporting depositors. (We are yet to learn what our Chief Minister has been doing apart from swapping mobile numbers.)
Guernsey is better off than the IoM … Landsbanki Guernsey has NO shortfall of assets.
There is little or no risk to public funds in helping the troubled local people who are depositors. And a great deal of political goodwill to be earned.
So if the States were to help out, perhaps acting jointly with Iceland, to guarantee a commercial loan to LG to restore the bank’s liquidity, it would almost certainly not cost one penny in the long run, and would rescue literally hundreds of local Guernsey pensioners from a bleak Christmas.
(One pensioner depositor I know was talking about travelling to Frossard House to commit suicide there in order to draw worldwide attention to the apparent lack of practical concern. Thanks to a support network he was talked out of it)
But the States are not yet, as I write this, showing a human face, it seems to me. Are they are scared to show they care?
Our Government’s new reputation for institutional racism (which we seem to have gained this week) is, it seems to me, going to be the fate Guernsey’s of lasting international reputation (at least unless the Chief Minister acts switftly to defuse it).
And we no longer will we be regarded as a well-regulated finance jurisdiction where it is safe for a pensioner to deposit their pension pot.
Indeed, even suggesting that could be the case will be regarded as ‘just a joke’.
‘Local Depositor’
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The lack of accurate information is extremely frustrating, the online forums are often driven by speculation, and the most amazing point is that one or two of the main contributors on the forums have offered to manipulate the forums and quieten down the most active members for increased payouts from 30 pence in the pound to a 100% return, as long as the administrator does not publish their names.
The forums are a very useful contact area, and provide essential support for depositors, however, they should be careful about venting too much vile and always seek the truth.
Many facts will come to light in the fullness of time, maybe even the names of the forum people who are offering to sell out their fellow forum members.
Keep your friends close and your enemies even closer
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Local Depositor
I really am getting fed up with long rambling complaints regarding the Landsbanki affair.
I did my homework and invested elsewhere which was safe so why didn’t others do the same.
There was no compensation scheme in place before the collapse so why should the local one cover it now.
You are suggesting the States help out financially with tax payers money, why should they, it was your choice where you invested your savings.
I too am sympathetic to the pensioners who have lost their hard earned savings, but trying to rubbish the island all the time seems to be totally the wrong way to go about it.
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