Sunday, 14 December 2008

from the newsletter dec 13th

Published Date: 13 December 2008 By Staff reporterAS Treasury officials met in Northern Ireland to discuss ways of helping mutual society savers, SDLP leader Mark Durkan last night appealed for the Government to ensure that no savers in the Presbyterian Mutual Society (PMS) lose their money.A delegation from the Treasury travelled from London to Belfast yesterday to meet with the Department of Finance and Personnel and the Department of Enterprise, Trade and Investment.They spent the afternoon discussing the review of Northern Ireland credit unions and mutual societies and it is understood that draft terms of reference for the review have now been cleared by the Treasury and passed to Executive ministers.Last night Mr Durkan, who has joined other politicians in lobbying the Prime Minister and Treasury about the PMS, said that savers’ money must be protected by allowing the PMS to be covered by the Financial Services Authority’s (FSA) compensation scheme, which guarantees bank deposits.Mr Durkan said he had discussed the situation with Treasury Minister Ian Pearson and was hopeful that the Government would not allow PMS savers to lose any money.The Foyle MP, who is also the chairperson of the Assembly’s Enterprise, Trade and Invest-ment committee, which has been examining the regulation of mutual societies, said: “The argument that I have made to the Prime Minister is that the financial services compensation scheme should apply to all regulated savings in the UK rather than just to all FSA-regulated savings.“Given that taxpayers throughout the UK are helping to provide liquidity to the banks and given that the financial services compensation scheme was all part of that series of confidence-guaranteeing measures, I believe that in the spirit of that it should extend to all regulated savings in the UK.”And Mr Durkan said if banks complained that the PMS had not paid to be a part of the guarantee scheme, that money could be paid in the interim by DETI and then recovered later.It is hoped if the PMS funds were underwritten it would remove the reason behind the crippling crisis of confidence.Mr Durkan said: “I have had representations from a constituent making a particular case about a family charitable trust with monies in the Presbyterian Mutual Society, and there are a lot of charitable organisations who cannot access money, which is having an impact on their work.”


anotherDonald said...

The fact that charities are being denied their money will not look at all good for the PCI
I'm guessing Mark Durkan is referring to a pastor in the North West (can't remember his name, it was in the papers some weeks ago)
He has £600,000 in the PMS for a charity based in Africa. It will not look good if the people in Africa are denied water/schools etc.
Yet the PCI are refusing any real tangible help except a measly hardship fund.
I'll try to find details about the charitable trust and post them here.

anotherDonald said...

I think this is probably the situation that Mark Durkan is referring to...........below

Church fund crisis halts pastor's work in Uganda

From the Newsletter
Published Date: 27 November 2008
THE Presbyterian Church last night said that some congregations are considering moves to help the Presbyterian Mutual Society (PMS) following an appeal from a Christian charity whose work in Uganda has been halted because its money is in the PMS.
Pastor Ernest Howie's Abundant Life International Ministries has £600,000 in the PMS and has been forced to postpone a contract to build a 500-student school in Africa because its money is frozen in the society.

The PMS suspended withdrawals after there was a run on the fund.

Pastor Howie, from Coleraine, said that even though there was no legal obligation on the Presbyterian Church to help those who have money in the PMS, he said that he "believed there were steps that the Church could take" to help, such as offering to pay back loans from the PMS and taking loans from mainstream banks instead.

Responding to Pastor Howie's appeal last night, a spokesman for the Presbyterian Church said: "That idea has been mentioned and we are aware that some congregations are considering it."

Pastor Howie said that vital aid work to sink boreholes and build schools in Uganda had been halted by the financial turmoil.

"We are involved in trying to build churches, to build schools, to sink boreholes for clean water in rural areas and all of this requires us to have access to the funds that are in the Presbyter-ian Mutual Society," he said.

"We are due to go Uganda on Saturday to sign a contract to commence some construction work which will give much-needed employment to very many poor people in Uganda and we are not now able to proceed with that work until the money in the mutual society is made available to us again."

And he called on local politicians to increase pressure on the Government to extend the Financial Services Authority's guarantee scheme to the society.

He said: "The big problem is that the run on the Presbyterian Mutual Society was caused by the guarantee that the British Government gave to banks so investors in the mutual society quickly withdrew funds and created an unhealthy financial situation in the mutual society.

"I must say that it looks like a form of discrimination when the Government has guaranteed Icelandic banks' deposits, yet won't guarantee a 100 per cent British financial institution."

The administrator running the PMS has told members that their money will not be touched until they have a chance to vote on how the society should proceed.

The administrator is expected to write to members by January, laying out recommendations on how the current crisis should be addressed.

goodbyepci said...

Found your blog at last groovyjon....
Thanks for setting it up.

Any interesting information for us?

Seems to have gone really quiet now, very little in the newspapers.

goodbyepci said...

Credit Crunches Again, by Alan Russell

It seemed like a very good idea at the time, back in 1982. Why not form a society restricted to members of the Presbyterian Church in Ireland where people could save their spare cash and other church members could take out loans. After all, it's the kind of thing that you would expect a Christian community to do for each other, bearing one another's burdens, the strong supporting the weak, church members in community helping each other out.

It was all for the benefit of Presbyterian Church members and no-one else was involved. So why has the Presbyterian Mutual project ended in tears for many people
who can't access the money that they need? It is just another financial
casualty of the credit crisis, a victim of the impersonal forces of economics that are beyond our control.

This issue is more than financial ­ it's moral and spiritual. Let's remember, that the Mutual Society was formed by Presbyterians, run by Presbyterians, invested in and borrowed from by Presbyterians and brought to its knees by Presbyterians. There was no-one else involved. So what happened? People got nervous and withdrew their money because they were told that the Mutual Society has not been covered by the government financial guarantee.

Historically, I imagine this will be seen as corporate Presbyterian financial stupidity. In financial terms, the society was as near to a closed system as you can get. There was no link to the stock market and an absolute undertaking not to speculate with the money. In other words a significant number of people came to the conclusion that it was better to trust the government than their fellow Presbyterians. Those individuals (and, please God, not congregations) who thought they would move in quickly to withdraw their money, just to be on the safe side, obviously didn't care about the consequences of their actions for others including the possibility that they might cause hardship and hurt. No thought of bearing one another's burdens here.

I'm sure that the majority of those who invested with the Presbyterian Mutual Society did so because they liked the idea of their money being available for other Presbyterians to finance their businesses, repair and extend their church property or even change the car ­ as well as the good return they were getting for their savings. However, that's not the message we have sent out to surrounding society. When it comes to money the
general public will conclude that Presbyterians are just as greedy, insecure, opportunistic, selfish and me-first as anybody in the community.

Those outside the church certainly won't take us seriously when we quote what the Bible has to say about money. We'll wince with embarrassment as the world dismisses us as hypocrites who secretly sneer along with the Pharisees about the financial naivety of Jesus. Critics of Christianity will take it for granted that Presbyterians treat Christ's teaching as irrelevant in the real world where only the shrewd and ruthless prosper.
Indeed, could it be true that too many of us think that Mammon is entitled to his little shrine on the mantelpiece of our home or even in a corner of the church office?

Will our grandchildren look back with regret at how much our witness for Christ lost credibility because Presbyterians blew the chance of showing the world how Christians could show trust and solidarity in hard financial times? Or will they give thanks for a Christian community that learned hard lessons about money and turned, in repentance, to take the message of their Lord seriously? It's up to us as to what the answers will be.

This article by Rev Dr Alan Russell, who is minister of Ballywalter Presbyterian Church, first appeared in the Presbyterian Herald (December 2008/January 2009 edition