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.
Gordon Brown, speaking on the banking debacle, publically proclaimed that all British citizens have been paid out in full. Rubbish!!
What about the few hundred British citizens who have had their savings stolen by the Icelandic Bank, ‘Landsbanki Guernsey’
I am not, nor did I ever intend to be a tax dodger. I, a 70 year old pensioner, paid UK tax on every penny I earned before it was deposited in Cheshire Building society, which without my prior knowlege became Landsbanki Guernsey.
Mr Brown should enquire further into this matter whereupon learning the truth he should make an executive decision to releave the pain and suffering of myself and many other Landsbanki depositers.
I have been rendered destitute by this situation, through no fault of my own!
My small retirement nest egg has been stolen and I have no alternative now but to become a burden on the frugal mercy of the UK social security system.
I surely have a right to be heard and have a place to state my case without government intervention
1. Why is Guernsey the only country not to support the depositors of a bank which failed in its jurisdiction?
2. Why, when the Guernsey State has received £1.5 Billion in revenue from the Finance Sector over the last 5 years (States of Guernsey own figures 2003 – 2007) can it not use General Treasury funds to stand in the depositors shoes to accelerate cashflow back to the savers?
3. Why, if there was no regulatory failure did the bank fail – and why, despite requests for correspondence between GFSC and FSA concerning regulatory oversight has this information not been released?
Questions Lyndon Trott has yet to answer:
A: Does the Chief Minister not think there is a moral stance that should be taken to help the depositors recover their savings as fast as possible?
B: The Administrator has made it clear that 3rd party intervention is needed to recover all savings – the UK Treasury has made it clear that it feels that Guernsey is a wealthy country and should use the benefits of its revenue to support he depositors; why will the Chief Minister not do so?
C: The Administrator has given the Chief Minister the information required to assess the cost of a support package to the savers; the chief minister has stated that this was given in confidentiality; however, in the intervening months has the Chief Minister requested of the administrator that the confidentiality be lifted so that he can discuss openly with the deputies so a consensus view can be obtained?
D: The chief Minister has claimed that there has been a net inflow of funds to Guernsey since the LG collapse rather than outflow – would it not be true to say however that the perceived inflow has been due to currency exchange fluctuations and in actual fact comparing like with like that there has indeed been capital flight from the Island since December?
‘You would be wrong to assume that the Guernsey Financial Services Commission works on behalf of the consumer and in instances where it does, there is a strong case to suggest that irreconcilable conflicts of interest arise’ said Deputy Laine.
Now openly stated, what was blindingly obvious but so difficult to substantiate. The GFSC and any self-policed investigations are totally discredited. Guernsey did not need to have spent an, as yet undisclosed sum, on experts more than 50 miles from home working under ‘in the back pocket’ terms of reference. The Landsbanki Guernsey customers could have come to the same conclusion free of charge, under any such restricted terms of reference. The fact that the terms of reference dreamt up by Harwood et al and the cost of the exercise, has been kept secret from the general public makes it a discredited, worthless document. Far from it vindicating the GFSC, as our duplicitous politicians would have you believe, it dams them. The attitude of the Chief Minister and his subordinates beggars belief; the one positive effect their response has had is to harden the resolve of the more passive members, raising the profile of the justness of the saver’s campaign.
Landsbanki Guernsey Ltd. was a Guernsey Bank, run by Guernsey Directors, regulated by the Guernsey legal and political authorities; all of whom had a duty of care to the people who trusted, the now discredited mantra, ‘Guernsey as a well run, well regulated, safe haven for your lifetime savings’; your security and comfort for your old age. Hang your head in shame. Next time you feel cold Mr. Trott and turn up your central heating, think of the pensioner turning theirs down because they have lost the money to meet anything more than the basic necessities for existence. You arrogantly and dispassionately state you have not had scores of pensioners queuing up at the Social Security offices requiring help. With your attitude is it any wonder? Many would rather die than compromise their independence and dignity to satisfy some false premise to your argument that if there is no hardship, there is no need for the States to get involved with such a tiresome matter. The Island drew revenue from the interest on those savings. The least you could do is fight their corner, not regard it as having better things to do with your time. Remember it was a Guernsey Company and is now a Guernsey problem. It may have had an Icelandic parent company, but the duty of the directors was to running the Guernsey company in the best interests of its clients. Guernsey has the problem and sand will not resolve it!
A true Chief is a leader and protector of all of his clan; objective, compassionate, just. In times of crisis he stands head and shoulders at the breach; not playing the big ‘I am’ but fighting for the rights, freedom and independence of his people. What have you done other than ‘spat’ in the face of the pensioner, and those planning to refrain from being a burden on the state? You justify your lack of steadfastness in the face of adversity as ‘not wasting a penny of taxpayers’ money on greedy investors’; an argument so full of false premises it is obvious that for once you did not get a civil servant to write your reply. The Isle of Man Government have been proactively campaigning and arguing their case with a physical presence in Iceland. Where is our Chief Minister and Treasury Minister? The answer, hiding a thousand miles behind the front line. We do not want taxpayer’s money but we demand proactive support. We do not want to see disgruntled investors from around the world staging an active campaign of negative publicity in Guernsey, but that is what is brewing and you will have brought it on yourselves. This problem is not going to go away until an amicable solution has been found. Saver’s are now engaging people to look in to liability and culpability; how much will defending the Island against litigation cost? How much long term social welfare costs will be invoked by the inhabitants? It has been noted that when politicians want to spend money, it comes from General Revenue; when they do not want to fund something it is because they do not want to spend taxpayer’s money. Double standards? Of course but that is the art of politics; much to its eternal shame.