Landsbanki Guernsey Depositors Face Bleak Midwinter
Depositors in Landsbanki Guernsey face a desperately bleak Christmas, with no prospect of the full return of their savings following the collapse of Landsbanki Guernsey on 6 October 2008.
The Landsbanki Guernsey Depositors Action Group (LGDAG), which [claims to] represent the 2,033 depositors from the collapsed Icelandic bank (although someit purposely excludes), have expressed extreme disappointment that the Governments of Guernsey, Iceland and the UK have been unable to find a solution to ensure the return of their savings, leaving many depositors facing an uncertain future this Christmas.
The LGDAG estimates that the vast majority of the depositors are British citizens, with a large proportion being pensioners who had their savings with Landsbanki Guernsey when the bank collapsed.
Eleanor Monaghan is an 83 year old widow, living in Guernsey. Eleanor deposited her life savings in Landsbanki Guernsey, a nearby high street bank. She is now reliant on help from her children and hand-outs day to day to survive. Yet these are the same people Chancellor Alistair Darling branded as “tax-evading high rollers”.
The LGDAG has been campaigning in Guernsey and Westminster to secure the full return of depositors‘ savings but this is looking increasing unlikely. The LGDAG are appealing to the British Government to fulfil their constitutional obligations to the Crown Dependencies to provide support to the savers of Guernsey in International negotiations. The group also believe their savings can be returned without additional cost to the UK taxpayer. Possible options include:
• £36m was transferred from Landsbanki Guernsey to its UK-based sister bank, Heritable, around the time it went into administration – this money should be returned to pay depositors
• The conditions on the loan given by the UK to the Icelandic Government to support savers who have lost out from the collapse of Icesave should be extended to cover Landsbanki Guernsey
• The Treasury should negotiate the return of £12M that Landsbanki Guernsey had upstreamed to Landsbanki Islands hf (LIH) prior to it being nationalised by the Icelandic government
• The UK Government should also ensure that any IMF loans are conditional on Iceland repaying Landsbanki Guernsey depositors.
Matthew Dorman, Spokesman for the Landsbanki Guernsey Depositors Action Group, said today: “While the politicians all go off on holiday the depositors of Landsbanki Guernsey face a distressing and increasingly desperate Christmas with their financial security in very real danger. UK Government and Guernsey Governments have thus far told us next to nothing about the prospects for the return of our savings.
The position regarding further payments is uncertain and depositors are facing the loss of up to 70% of their savings, unlike personal depositors in other jurisdictions, all of whom have been reimbursed by their governments. We believe that there are a number of possible solutions to the situation which have not been properly explored. Many people are running out of not just hope, but also out of money. More needs to be done to help us now.”
Case Study – Eleanor Monaghan
Eleanor is an 83 year old widow currently living in an “over 55’s” apartment in the Castel Parish in Guernsey.
“I have always believed in Building Societies, I can remember as a child going with my mother every Saturday with our passbook into the local office in Nantwich, and that has stayed with me throughout my adult life; whenever possible I would try to put some savings away.
I came to Guernsey in 1962; my late husband, Frank, was the manager of a local branch of a UK company, and we raised our two children here. They are now living in England, and I have five grandchildren, who I don’t see as often as I would like, but they do come over in the summer.
When Frank died 6 years ago his company pension died with him. I do get some money from the States (of Guernsey) but I have never worked so it’s not very much. On my own I couldn’t cope with the garden at our bungalow in the Vale, so I sold up and moved to my present home, an apartment in the Castel Parish. There was some money left over and I put this with my other savings into the Cheshire Building Society, and the interest was paid to me monthly. I wasn’t bothered when they wrote to tell me they had been taken over by Landsbanki, the interest still came every month, slightly more actually, and I knew any bank in Guernsey was bound to be safe.
I was devastated when I heard in October that the bank had gone broke and I had lost my lifetime’s savings, I just don’t know how I am going to manage now. The children have tried to help, but it’s so expensive in England now and they have the little ones to think of. The bank have sent me some of my money but that’s in the TSB and the interest is so small, I am going to have to dip into the money just for my weekly shopping, and I don’t know how long it will last. “
My neighbour says “Don’t worry – the States are going to sort it all out”, but I have read letters in the Press from people who say they shouldn’t help us. I wish my Frank was still here, he would sort it out for us, but at the moment I can’t sleep for worry, and I just seem to burst into tears all the time. “
Notes to Editors and others
• The LGDAG is a list of some depositors, acting as one voice to be heard by the appropriate authorities in Guernsey, the United Kingdom and Iceland. The group will [try to] ensure that deposits are returned in full. Landsbanki Guernsey (Action For Depositors) Ltd is a limited company registered at Companies House, set up to represent the interests of all 2,033 depositors, in the return of their deposits in full.
• The Landsbanki Guernsey Depositors Action Group has been established to secure the return of 100 per cent of depositor’s money, which was lost following Landsbanki Guernsey being taken in administration.
• Landsbanki Guernsey went into administration on 6 October 2008
• The Administrators of the bank agreed to recompense 30p in the £1 and the 2,033 depositors of Landsbanki Guernsey therefore stand to lose over 70% of their savings.
• Chronology of Events:
6 October 2008: Landsbanki Guernsey’s parent, Landsbanki Islands hf ceases trading on Icelandic stock exchange. Administrator called in to Landsbanki Guernsey; 2033 individual depositors, the majority British, affected.
7 October 2008: Administrator called into Heritable Bank, Landsbanki sister company in the UK.
8 October 2008: Alastair Darling MP states in BBC interview that Icelandic Authorities have reneged on their obligations to pay depositors compensation; subsequent tape records dispute this assertion. UK Treasury Dept Freezes £4 Billion of Icelandic assets to protect UK savers under Anti terrorism legislation. Treasury passes 182,000 UK retail savers accounts in Kaupthing and Heritable Banks with deposits of £3 Billion to Holland’s ING bank.
13 October 2008: Bank of England offers £100 Million to Heritable Bank to assist UK savers.
16 October 2008: Landsbanki Guernsey Administrator awards partial depositors payback of 30% – cautions against expectations of full repayment.
22 October 2008: UK treasury negotiates possibility of £3 Billion loan to Iceland to assist UK based Icesave depositors.
27 October 2008: Repayment of UK Icesave deposits begins.
6 November 2008: Ian Pearson MP states that non resident non domiciled British Citizens can open UK bank account: LGDAG survey of 58 banks and building societies indicates this is incorrect.
19 November 2008: $2.1 Billion IMF Bailout package approved, after UK block removed, on securing compensation package for UK domiciled Icesave depositors. UK Government could have met its constitutional responsibilities to its Crown Dependencies by ensuring this protection covered all savers.
24 November 2008: The Chancellor states in pre budget report that ‘…Isle of Man and Channel Islands. They attract banking customers with lower taxes – without contributing to the UK Exchequer.’ LGDAG research shows both Guernsey and the Isle of Man are signatories to the European Union Savings Directive 2005 (EUSD), which forces EU resident savers depositing money in any country other than the one in which they are resident to choose between forfeiting tax on interest earned, at the point of payment, or allowing notification by the offshore banks to tax authorities in their country of residence.
25 November 2008: HM treasury announces a cash supplement Requirement of £23.4 Billion to refinance banking sector; including Icesave UK customers and Bradford and Bingley Guernsey.
10 December 2008: Justice Select Committee hearing to discuss Crown Dependencies – LGDAG presents extensive submission to request clarification of UK Government actions under its Constitutional Responsibilities and requests meeting with Ministers in charge.