Savings protection boost approved

Isle of Man savers are currently protected up to £15,000

Legislation to protect savings held in Isle of Man banks up to the value of £50,000 has been approved.

Members of Tynwald held an emergency sitting - the first since 1967 - to approve the new measures on Thursday.

But during a three-hour debate treasury minister Allan Bell did not say whether depositors with Kaupthing Singer & Friedlander would be protected.

The Isle of Man subsidiary of the bank - the latest victim of the global financial crisis - has been wound up.

The Financial Supervision Commission (FSC) confirmed news of the bank's demise on Thursday.

It was owned by Icelandic banking giant Kaupthing - the third institution to be taken over by its government.

Depositors contacted

Although the Isle of Man bank was not owned by the UK subsidiary, it had a "significant working relationship", the FSC said.

A spokesman for the FSC said: "Following consultation with the commission, the board of Kaupthing Singer & Friedlander (Isle of Man) Limited has notified the commission that it has passed a resolution that the company be wound up.

"The commission has suspended the banking licence of Kaupthing Singer & Friedlander (Isle of Man) Limited with immediate effect."

The FSC said that depositors would be contacted and invited to make a claim once the depositors' protection scheme (DPS) was activated.

A statement on whether savers will be protected by the new DPS is expected later.

Previously, the level of guaranteed protection for savings in Manx banks was £15,000.

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