MPs set to ignore savers who lost money in Iceland
When the Icelandic banking subsidiaries operating in the Isle of Man and Guernsey collapsed last October there were hopes that the UK government would step in to assist. These hopes were further strengthened after the UK government came to an agreement with the Icelandic authorities to see that all UK customers were reimbursed their lost funds. However, an influential committee of MPs has ruled that the UK government does not need to extend this compensation to those caught up in the Isle of Man and Guernsey.
Despite the fact that 94% of depositors who lost money in the Isle of Man and Guernsey subsidiaries of Icelandic banks are British citizens, the Treasury select committee has only recommended that charities be reimbursed. Quite how you can differentiate between charities and individuals in this particular instance is a little confusing to say the least.
The issue is further complicated by the fact that the Isle of Man and Guernsey are able to operate within the UK compensation system, using a UK "passport", even though they are outside the jurisdiction of the UK authorities. This is a situation which looks sure to be changed in the short to medium term with more emphasis placed back upon the local governments.
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