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Tynwald approves depositors' compensation regulations

Treasury Minister Allan Bell has confirmed the extent to which the Island's banking industry will fund compensation for depositors in the collapsed Kaupthing bank.

Mr Bell brought regulations to Tynwald, to ensure banks maintain their contribution to the compensation fund, in whatever form is finally agreed.

Next month, depositors will vote on whether to accept Mr Bell's Scheme of Arrangement, or push for the liquidation of KSF, which would trigger the Depositors' Compensation Scheme.

Before the regulations were agreed in Tynwald, the minister reiterated his aim was to ensure there was no room for doubt as to liability:

"Under the bankers' liability under the Depositors' Compensation Scheme, the maximum exposure for the banks is £200 million - this is where the £200 million [figure] has come from.

"There is £350 million altogether - £150 million was from the taxpayer and £200 million was from the banks.

"This was the £200 million element of it, and it is to ensure there are no cracks in the floor, that nothing slips through, should the Scheme of Arrangement ultimately get approval by the depositors, later on next month."

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