Islanders' plea to Osborne over Icelandic bank losses

Depositors in the collapsed Isle of Man subsidiary of Iceland's Kaupthing Bank today called on Chancellor George Osborne to respond to their pleas for financial help,

Some 11,000 islanders saved up to £840 million in the Manx Kaupthing Singer and Friedlander bank. In April, they wrote to the Treasury and the Isle of Man government with a proposal to create a joint loan trust to help depositors receive funds before the 2017 deadline when the bank's liquidator estimates it will make final payments.

Around 73% of returns from the liquidation of KSF (IoM) have already been paid out to savers, but Richard Carter, spokesman for the Kaupthing Singer and Friedlander Depositors' Action Group, said many depositors had put their pensions and funds from house purchases into the bank, and could not afford to wait another six years for the rest.

Final recovery from the liquidation is expected to be 98p in the pound, so Carter said paying that in advance via a loan trust was a small price for the UK and Manx governments to pay to enhance their reputations as financial centres.

"We're calling on the Government to give our proposal full consideration. Setting up the loan trust would be the moral thing to do."

Carter added: "This loan trust initiative is a low cost and efficient device that speeds up the return savings to needy pensioners and victims of regulatory incompetence. The IOM government, quite reasonably, say that responsibility for this case is shared with HMG on the mainland. For some reason, when HMG breathes down their neck they say 'don't worry, we will sort it out' and then fail to do so, claiming they cannot afford the resources. Westminster's Treasury Select Committee has pointed out that when you look at the undiluted facts behind this case, both governments bear responsibility and this is something that needs to be gripped."