Glimmer Of Hope For Kaupthing Savers

by Ed Bowsher on 15 October 2008  |  9 comments
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Last night's edition of `Channel Four News' contained some good news for savers who have an account with Kaupthing Edge in the Isle of Man and the Channel Islands.

Last week we reported in 'Bad News For Kaupthing's Isle Of Man Customers' that, unlike in the UK, ING hadn't bought Kaupthing's Isle of Man operation. Even worse, Alistair Darling's promise that Kaupthing savers wouldn't lose out didn't apply to the Isle of Man and the Channel Islands.

As a result, Isle of Man savers could only rely on the Manx government's Depositors' Compensation Scheme which will only pay out compensation to a maximum of £50,000 per saver.

In the Channel Islands, there is no protection for UK citizens.

I received an email from one Fool who had put 90% of his life savings, which amounted to £400,000, in a Kaupthing Isle of Man account. Obviously, he was shocked by the news.

However, last night's `Channel Four News' offered a glimmer of hope. Jon Snow interviewed the Icelandic Prime Minister, Geir Harde, who said the following:

`Well, we feel that we should do our best to work together and solve this problem so nobody gets hurt. And I do think to a large extent that the deposits , the assets rather, of both Kaupthing and Landsbanki, will be sufficient to take care of these claims. If we take proper care of these assets and maintain the value, I am sure this can be worked out.'

Jon Snow asked: `So do you think they will get something back?'

Harde:  `I do think so. I think the loan that the UK government provided yesterday to Landsbanki was very helpful. It will enable that bank, Landsbanki to keep up the value of their assets.'

So it's possible that there will be enough money in the Kaupthing pot to pay out to Isle of Man and Channel Islands savers. Let's hope so..