Bank committee cannot take action

Some depositors had opposed the government scheme

A Tynwald committee looking into the collapse of a Manx bank will be unable to take any action against institutions that contributed, its chairman said.

Kaupthing, Singer and Friedlander Isle of Man (KSFIOM) depositors are being urged to submit evidence to the select committee, chaired by Juan Watterson.

It will examine what caused the bank's collapse and any action taken by the Financial Supervision Commission (FSC).

But Mr Watterson said it did not have the power to implement a solution.

KSFIOM, a subsidiary of Icelandic bank Kaupthing, collapsed in October 2008 during the crisis that engulfed the Iceland banking system.

It is going to be a very emotive subject Juan Watterson, committee chair

The bank was put into liquidation in May after creditors rejected a compensation scheme put forward by the government as an alternative.

Tynwald, the Isle of Man's parliament, has appointed MHKs Mr Watterson and John Houghton, plus Eddie Lowey MLC, to report back by March 2010.

Depositors and organisations affected by the collapse are being urged to submit evidence by 25 September.

"It is going to be a very emotive subject," said Mr Watterson.

"There is going to be a lot of submissions and I really hope that the people will take the time to write to the committee with their issues and concerns.

"It is important to say that the committee is a retrospective committee and it's not going to be a committee that's going to have the powers to implement the solution to this that I think a lot of the depositors want.

"But it will hopefully come up with a lot of answers to questions they have had about the role of the FSC and probably Treasury as well in the downfall of Kaupthing, Singer and Friedlander."

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