NI Presbyterian mutual society, Short of funds for withdrawal?

NAR

Toastandbutter wrote: »

A word to absoluteutopia, NAR, Darzip.

The formal investigation into this by the Treasury Select Committee found that PMS savers were innocent victims of "a fatal regulatory gap" – chairman John McFall’s words.

Savers were repeatedly assured there was no speculation with their money. The select committee said no lay person could reasonably have known about the regulatory pitfall Darzip (see TSC link below) - will you retract the "naive" jab Darzip?
Assured by whom? Why did the Church not check out if there were any regulatory pitfalls before commending it to parishioners?

The TSC said PMS savers were assured there was no speculation with their money; the value of their 'investment' could not rise or fall, according to the terms of their savings. All they could do was get interest.
Assured by who?

Anyone else who saved under those terms in the UK had their money guaranteed by government. And as the government was responsible for overseeing the PMS, approved its constitution and collected the PMS accounts every year, surely nobody is suggesting they should not be treated like other UK savers on account of....their religion?
Not correct, terms are not the same - that is my point!

Furthermore, *at least* £175m of the £200m loans offered yesterday are LOANS which must be repaid (the PMS still earns some £9m a year in rent and loan repayments etc and its assets will recover).
So why didn't the Church just put up the loans? Are you telling me they don't have the collateral?

I have come to wonder if at least some of the people who attack support for the PMS might;-

- Be looking to lash out after having lost much money in risky investments (savers did not speculate with the PMS).

or;-

- Did not save at all and are jealous of those who did.

or;-

- Have an axe to grind against people who choose to have faith.

absoluteutopia, NAR, Darzip - would the three of you care to tell us if you fall into any of these three categories??????
Absolutely not on all 3 counts.

And I see you ignored my questions!!

Toastandbutter

Thanks NAR

Your first questions about the church; if you can squeeze any more money out of the church nobody here will complain.

The problem is that people have lost access to their savings two years ago and they really don't care who gives them their money back.


In answer to your questions in red - what you don't seem to realise is that you are not querying my opinions with these questions.

You are querying the findings of the Treasury Select Committee.

Many people who weigh in with both feet on this do so without having read this report.

In fact the directors of the PMS are under investigation and risk disqualification. Two of them are accountants are are also under investigation by their professional body, as is the PMS's auditing company.


Again, few PMS members will object to them being treated stringently if the investigations justify it. But you nor I are privvy to the findings of these investigations to date.

Oddly enough, the ONLY people not currently facing any embarrassing public accountability over this whole thing are the government people responsible for the "fatal regulatory gap".



The problem is, once again, while you debate all these points, many elderly and innocent PMS savers are dying off without access to their meagure life savings.

As for my suspicions about some critics of PMS support, I am glad that none of them apply to you and that you are acting purely from the position of a fully informed and publicly spirited individual.

T&B

Toastandbutter

BTW NAR

Here is an 'executive summary' of the findings of the Treasury Select Committee. The report did find the PMS directors to be at fault, but the primary burden was on the "fatal regulatory gap".

Did I mention the "fatal regulatory gap" yet NAR?

Its just that you seem be be missing the "fatal regulatory gap" and prefer to only critique the church and PMS savers instead.

BTW did anyone see my "fatal regulatory gap" around here anywhere?

I'm sure I left "my fatal regulatory gap" here somewhere.

Could someone please order me another cold "fatal regulatory gap" please.

I'm getting quite thirsty with all this debating with people who seem to think they are experts on a crisis the rest of us have lived and breathed for two years, while they seem never to have heard of this "fatal regulatory gap".


MPs call for regulatory gap closure following mutual society losses

18 February 2010 The Treasury Committee today releases its report, 'The Failure of the Presbyterian Mutual Society', which highlights that in the case of the Presbyterian Mutual Society (PMS) there was a regulatory gap which was neither publicised nor filled and calls for this to be addressed in restructuring the financial system.

• Report: The Failure of the Presbyterian Mutual Society
• Treasury Committee

It also calls on the United Kingdom Government and Northern Ireland executive to act together to ensure that individual PMS members do not suffer unduly.
John McFall, Chairman of the Committee, said:

"It is possible that in due time the affairs of the Presbyterian Mutual Society will be unravelled. However, many members cannot wait this long for their money. We heard from some who urgently need funds for medical treatment, some who quite rightly want to enjoy their retirement before it’s too late and others who are struggling simply to meet the necessities of daily life in the current economic climate."

"We have long argued for the creation of a system which makes it crystal clear when whether and to what degree deposits are protected. We do not believe that, as a general rule, the taxpayer should stand behind an financial institution.
"However it is clear in the case of the PMS there was a fatal regulatory gap, which no lay person could reasonably have identified. Ministerial Working Group must report swiftly to ensure that MS members do not suffer unduly. We are not prescriptive about what solution is best; it is however clear that a remedy must be found."

What happened and why
The PMS, a Northern Ireland Industrial and Provident Society, was subjected to a run on its deposits in October 2008, which resulted in its entering administration. The estimated realisation value of its assets is significantly less than its liabilities.
There is some prospect of recovering members' money if the administration is allowed to run for a long time, but that would continue to mean that members of the Society, who might have pressing needs, would not have access to their funds.
Moreover, there is legal uncertainty as to whether shareholding members of the society are entitled to the return of any of their funds until those who have made loans to the Society are repaid. The PMS was not regulated by the FSA, nor was it part of the Financial Services Compensation Scheme. Its members have no legal entitlement to reimbursement.
In Northern Ireland, industrial and providential societies are registered by the Registry of Credit Unions and Industrial and Provident Societies (the Registry). The function of the Registry is simply to hold a register of the 180 IPSs operating in Northern Ireland, and to make sure their annual returns are filed. The FSA performs a similar function in relation to industrial and provident societies in Great Britain, in addition to its financial regulation responsibilities.
The FSA told the Committee that it took steps to mitigate the risks that registered societies were engaging in activities which should be mitigated. The Committee accepts that the Registrar had no regulatory functions in relation to Industrial and Provident societies, and could take no official action. However, it does not believe that Department of Enterprise, Trade and Investment NI (DETINI) was so circumscribed.
The Report notes DETINI’s opinion that it was not their legal responsibility to regulate the PMS or manoeuvre them into regulation. However, the Committee were surprised and concerned that the Department had access to all the relevant information and yet this did not result in any preventative action or further examination being undertaken.
This might well have entailed action in London as well as in Belfast, but as the department closest to the problem, it is reasonable to expect DETINI to have taken a lead in identifying the problem, and in seeking a solution, the Report says.
The future
Today’s report calls for a system in future where, in cases like the PMS, it would be crystal clear that deposits were made at the depositors’ own risk, and there was no question of government assistance.
It should be clear that it is the directors, not the government, or the regulator, who have ultimate responsibility for such an institution's management, the Report says. The Committee does not believe that, as a general rule, the taxpayer should stand behind financial institutions.
The banking sector in Northern Ireland is regulated by the FSA just as in Great Britain. There were no clear indications that the regulatory system for IPSs differed between Northern Ireland and Great Britain. It is possible that a society which was mutual in life will prove to be far from mutual in death, and that small savers will lose out most heavily.
If these savers are to be assisted, the United Kingdom Government and Northern Ireland executive must act together to ensure that individual PMS members do not suffer unduly. The Report is not dogmatic about what solution is best. However, it emphasises that a solution must be found, and found quickly.

---

Toastandbutter

PS NAR

In case I didn't make myself clear, neither the church, nor the PMS savers can in any way be blamed for "a fatal regulatory gap".

That is because the government and its agencies regulate mutual societies, not churches and not mutual savers.

The Prime Minister and Chancellor have both openly accepted that this "fatal regulatory gap" necessarily puts the onus on the government to make recompense to the people who have found the gap to be fatal.

THAT is why the treasury has put up the loans package.

I repeat, most (min £175m) if not all of this £200m package is a LOANS package.

LOANS mean the PMS savers must repay them to the taxpayer at the going Treasury rate.

Perhaps the taxpayer might even profit from this crisis!

How would you feel if you ended up profiting from this "fatal regulatory gap" NAR?

;-)

NAR

And just where did I be critical of PMS savers T&B? My point, if you care to review my posts, is that IMHO it is the Church that should be financing the solution not the taxpayer. Are you denying that they have the funds and collateral to do so?

To quote you "The Report notes DETINI’s opinion that it was not their legal responsibility to regulate the PMS or manoeuvre them into regulation."
Also "However it is clear in the case of the PMS there was a fatal regulatory gap, which no lay person could reasonably have identified."
But the Church should have ensured that all monies deposited were safe before encouraging parishioners to deposit. Do you disagree T&B? If your Church encourages you to be involved with an organisation is it not reasonable to assume that the Church would have carried out due diligence and therefore the lay person would quite happily accept the Church's recommendations. The fact is that the Church failed to carry out due diligence on the PMS and led their parishioners by the nose over the abyss!

CleverWithMoney

The directors of the PMS had a responsibility to apply for regulation from the FSA, as does anyone who undertakes a regulated activity. Arlene Foster and the FSA have both confirmed this. The directors were also responsible for the 'categorical assurance that they do not under any circumstances speculate with investors' monies'. If that were true then how come half the loans (£86m) were made for Building Sites and Development lands? Now worth @ £33m incidentally.

Stafford Carson feels that everyone should get all their money back. Over my, and many other, dead bodies!

brick

NAR wrote: »

failed to carry out due diligence

Is it likely that "due diligence", had there been cause to undertake, would have identified fatal flaws not picked up by "corporate governance reviews"?

2004 - Your Board has given serious consideration to the future of the Society in the light of its remarkable expansion and at present is carrying out a review into its corporate governance in order to make sure it is soundly based and wisely administered in the future.
2005 - Since last year, as a result of our consideration of corporate governance, we have introduced some changes...
2007 - Last year I reported that we were looking carefully at the governance of the society and this has now been fully carried out.

darzip

Toastandbutter wrote: »

A word to absoluteutopia, NAR, Darzip.

The formal investigation into this by the Treasury Select Committee found that PMS savers were innocent victims of "a fatal regulatory gap" – chairman John McFall’s words.

Savers were repeatedly assured there was no speculation with their money. The select committee said no lay person could reasonably have known about the regulatory pitfall Darzip (see TSC link below) - will you retract the "naive" jab Darzip?

The TSC said PMS savers were assured there was no speculation with their money; the value of their 'investment' could not rise or fall, according to the terms of their savings. All they could do was get interest.

Anyone else who saved under those terms in the UK had their money guaranteed by government. And as the government was responsible for overseeing the PMS, approved its constitution and collected the PMS accounts every year, surely nobody is suggesting they should not be treated like other UK savers on account of....their religion?

"Fatal regulatory gap", remember?

In any event, it was a cinch to join a Presbyterian Church to gain access to the fund if anyone was interested and by all accounts at least some people did exactly this.

Furthermore, *at least* £175m of the £200m loans offered yesterday are LOANS which must be repaid (the PMS still earns some £9m a year in rent and loan repayments etc and its assets will recover).

I have come to wonder if at least some of the people who attack support for the PMS might;-

- Be looking to lash out after having lost much money in risky investments (savers did not speculate with the PMS).

or;-

- Did not save at all and are jealous of those who did.

or;-

- Have an axe to grind against people who choose to have faith.


absoluteutopia, NAR, Darzip - would the three of you care to tell us if you fall into any of these three categories??????



BACKGROUND INFORMATION;-
http://www.parliament.uk/business/news/2010/02/mps-call-for-regulatory-gap-closure-following-presbyterian-mutual-society-losses/

http://www.publications.parliament.uk/pa/cm200910/cmselect/cmtreasy/260/260.pdf


T&B

Toastandbutter, I'm not retracting the naive comment, I've got family members and family friends who saved with the PMS and they were extremely naive. They were mislead and lied to by people within the PMS who gave them guarantees that their money was safe and covered. I advised against putting any money into the PMS as I knew it wasn't safe through a banking friend, but the church connection was too strong. If it was a high street bank with no church affiliation I'm sure I would have been listened to. I've got no problem with people having faith, except when it clouds judgement.

The very idea that the church was involved with money lending is completely wrong. People might say its separate from the church (convenient for PCI, washing their hands of the debacle) but it wasn't. If I lived in NI and was a PMS saver my FWO envelope would be barren out of principle.

Not sure if the three questions were specifically aimed at me, people can be naive, with faith or without. I've invested wisely and safely, have no jealousy and definitely have no problem with religious people. You seem to have read way too much into my post.

amadan22

either read every post on this forum and understand or go away. you're input is pointless. to nar by the way.

goodbyepci

http://www.official-documents.gov.uk/document/cm79/7959/7959.pdf