Calling all British expat vicims of Kaupthing and Landsbanki banking collapse

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With major banks across the world going bust, it's no surprise that news of the demise of some of the smaller offshore banks has received little publicity.  Offshore banks are often seen as tax-havens for the wealthy, so it is maybe natural that the public at large have more to worry about than the losses of the privileged few.

Two offshore banks have recently fallen, hit by the total collapse of the banking system in Iceland, where only this week the government has descended into chaos.  Landsbanki Guernsey and Kaupthing Isle of Man were two popular choices for British expats around the world, but both have failed, and neither is covered by the UK compensation scheme.  Depositors stand to lose most of what is sometimes their life-savings, and the UK government is reluctant to do anything about it.

Following the terrorist attacks of 9/11, UK banks required proof of a UK address in order to open a savings account, as part of measures to prevent money-laundering.  This is clearly something that British expats have been unable to provide, and faced with a choice of putting their life-savings in a foreign bank (sometimes in locations with unstable governments) they chose offshore banks of good repute, only for them to fail.

Today brought hope for the depositors with Kaupthing IOM, as the Isle of Man government announced its intention to increase its early payment scheme from £1000 to £10,000, with around 40% of depositors being refunded in full (see article).  The future for Landsbanki clients is less rosy however, as redress is being sought from the Icelandic government, which collapsed on Monday following the resignation of the coalition prime minister Geir Haarde.

There are a number of pressure groups who are pushing for the UK government to intervene, and Graham Leon-Smith, leader of the Senior Citizens Party is calling for those affected worldwide to join the campaign, so that he is able to raise the debate in parliament via an Early Day Motion.  It is estimated that around 8,000 to 10,000 expats will be affected by the collapse of Kaupthing, and 2,000 affected by Landsbanki, but few have made themselves known so far. 

If you are affected by the banking collapse of Kaupthing or Landsbanki, steps you can take are:

• Write to your MP and ask them to raise the matter with Alistair Darling
• Go to www.seniorcitizensparty.org.uk and join the campaign (free)
• Email a copy of your MP letter to editor@senior-voice.co.uk

You can read the article in The Times by clicking here.

A protest site for Landsbanki Guernsey can be found by clicking here.