mrken30

I got a letter today from the Liquidator of Kaupthing Singer & Friedlander (Isle of Man) Limited (in Liquidation) dated 9 August 2016. This bank went under in 2008 and some people are still waiting for their money. The depositors protection scheme was unfunded and only covered up to £15000. Just a warning to anyone considering using offshore banks. Kaupthing Singer & Friedlander (IoM) Ltd (In Liquidation) - 9 AUGUST 2016

celticgrid

That was then.

This is now:

From here.

Pulaski

I can't help but wonder what reserves the compensation scheme has in a territory the size of the Isle of Man. ..... If a bank with 10,000 customers, each with £50,000, failed, does the compensation scheme have access to £500,000,000 to pay out the compensation, or would the Isle of Man end up in the same sort of pickle as Iceland did a few years ago?

celticgrid

I work on the basis, rightly or wrongly, that if you use a division of a major UK bank (Lloyds, etc.) then you are not as exposed - the parent is not going to let the offshore bit fold and leave folks stranded, unless there are far bigger problems!

I also work on the basis of not having a massive amount of money in an IOM or any other bank!

sir_eccles

I was about to say I work on the basis of not using Bob's mattress warehouse because I'd never heard of it. Then reading about the bank on wikipedia it appears the S&F part was over 100 years old when it was bought by a rather large Icelandic bank that got brought down by the whole crash thing.

mrken30

I think Lloyds is 80% tax payer owned. Do you think the UK Govt. would have bailed out the overseas territories ? The UK Govt. took the IOM funds of Kaupthing and the IOM depositors were not allowed access to those funds.They has to wait for the other banks to pay into the scheme and eventually got some money back. The depositors scheme did not hold any funds at the time, it worked a bit like social security.

Giantaxe

That was the reason I passed on Lloyds trying to shovel me off to the I of Man many years ago. I wonder what the percentage funding the scheme has now?

Pulaski

Barings bank was well over 200 years old when it collapsed, and it was on-shore, and the Bank of England still let it fail. Of course Barings didn't have many "ordinary" customers, but the most any one individual could get from the depositor compensation scheme at that time was 75% up to a maximum of £15,000.

mrken30

Be interesting to see if the UK amends the compensation limits after Brexit completes in 2019.