Wednesday 29 January 2020

Three options proposed to rescue savers' cash

Political leaders in the North were today considering three options including a last ditch "hardship fund" to solve the financial crisis over the Presbyterian Mutual Society.

And while First Minister Peter Robinson and deputy First Minister Martin McGuinness still hope to see a commercial "buy-out" for the financial institution's assets, they revealed they have a "plan B" which they said would avoid turning to a hardship fund to support savers.

Both leaders today repeated their determination to secure a solution that the 10,000 Presbyterian Mutual Society (PMS) savers will be satisfied with, but they declined to go into detail on their continuing negotiations with British Prime Minister Gordon Brown.

The PMS hit difficulties after people began withdrawing money in 2008 amid international concerns for the future of financial institutions.

It subsequently emerged the PMS was not regulated by the Financial Services Authority (FSA) and did not qualify for Government support.

Mr Robinson, however, hit out at a report from the House of Commons Treasury Committee which yesterday claimed that a "fatal gap" in regulation was to blame and which claimed DUP Minister Arlene Foster's department of enterprise could have taken preventative action.

The First Minister criticised the committee chair, Labour's John McFall, and said of the report: "It is a shoddy buck-passing exercise.

"The chairman seemed to downplay that it is his party's government that is chiefly responsible."

He added: "It was full of criticism and vacant of any solutions."

The First Minister said he would be meeting the Prime Minister again with Mr McGuinness to continue to press for a rescue plan for PMS savers.

He revealed that the work to identify a solution to the problem included the three options.

Efforts are under way, firstly, to see if a bank will take on the PMS assets as a means of securing a future for its savers.

Secondly, ministers in the North are researching their own 'plan B', which would require Treasury support, while the final option is a possible hardship fund.

Mr McGuinness underlined his own commitment to securing a resolution to the issue.

"Peter and I are as one on this," he said. "Our aim is to save their savings."

Pressed on the likely success of the three options, he added: "People are not interested in options, they are interested in a solution."

The Sinn Fein representative said the Commons committee's conclusions on the PMS were "less than helpful".

With the PMS currently under administration, the Belfast High Court last week ruled that shareholder members of the society (those with less than £20,000) are not creditors and are not entitled to income from the assets identified by administrators.

PA Media

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