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New chapter in Kaupthing story about to begin

Moves to recover assets from the collapsed bank Kaupthing, Singer and Friedlander get underway this week, with KSF likely to be put into liquidation at a court hearing tomorrow.

It follows last week's vote by depositors to reject the Manx Treasury's Scheme of Arrangmenet, as an alternative to liquidation.

Instead, the Depositors Compensation Scheme will be activated.

That will be funded by selling the assets of KSF, a levy on banks and a cash injection of £150million by the Manx government.

Treasury Minister Allan Bell says although the DCS was not the preferred option, it will prove the Island's economy is robust enough to provide one.

He told Manx Radio:

"Most other small jurisdictions, even as we speak, still don't have a scheme in place and our scheme was at least as good as the United Kingdom's scheme, until the UK government itself put in further support behind that.

"So I think we can hold our head up. We have anticipated the need to demonstrate consumer protection [and] that has set us ahead of most other jurisdictions until quite recently.

"And that in itself has also been reflected, I think, on the growth in bank deposits the Isle of Man has enjoyed over the last few years."

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