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Landsbanki depositors stage protest in Guernsey

Depositors who lost money in Landsbanki Guernsey held a protest outside the islands Government House today (Oct 7), a year to the day after the bank collapsed.

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Depositors who lost money in Landsbanki Guernsey held a protest outside the island’s Government House today (Oct 7), a year to the day after the bank collapsed.

They picketed the building holding up placards saying: “Guernsey only country in world to refuse to bail out savers” and “Guernsey still unsafe for savings”.

The protesters lost money when Icelandic bank Landsbanki collapsed at the height of the credit crunch last October.

Guernsey had no depositors’ compensation scheme in place at the time, which meant the savers were afforded no statutory protection in the event of the bank’s failure.

Guernsey has since established such a scheme, but it does not operate retrospectively, leading to accusations the island was abandoning savers hit by Landsbanki’s failure.

The scheme Guernsey has since created has also been criticised for being inadequate due to the limited funds its holds and various restrictions on the circumstances in which it will pay out. 

Depositors have not lost all their money, however.

The administrators of Landsbanki Guernsey, Deloitte, have paid 30 pence in the pound to depositors, plus interest, and a further payment of 25 pence in the pound is expected soon.

Deloitte said it expects to make a further “substantial payment” at the end of the year or early next year. The exact sum will depend on money recovered from Landsbanki’s parent company, Heritable Bank, it said.

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