The British government may have to look at its relationship with the Isle of Man after savers with accounts on the island were hit by the collapse of Icelandic banks, Prime Minister Gordon Brown has said.
Thousands of savers with a unit of Iceland's Kaupthing bank face losing hundreds of millions of pounds after Icelandic authorities took control of the bank in October.
The Isle of Man is not constitutionally part of Britain but is a self-governing Crown dependency with the Queen has its head of state.
It regulates its own banking system so savers there are not covered by Britain's deposit protection scheme.
"I'm obviously very concerned about this. The Isle of Man is not within our jurisdiction for regulation," Brown said in an interview with the BBC when asked about the plight of investors worried about their savings there.
"This is now a matter that the international authorities are dealing with. We are talking to the International Monetary Fund ... about the repayment of debts that these banks have entered into," he said.
"This is something that we'll have to pursue internationally and I think we may have to look at the relationship between the Isle of Man and Britain in this respect," he added.
Iceland's three biggest banks - Kaupthing, Landsbanki and Glitnir - collapsed under the weight of billions of dollars of debts accumulated in an aggressive overseas expansion, shattering the currency and forcing Iceland to seek aid from the IMF.
REUTERS