Tynwald has overwhelmingly supported a new compensation scheme for people with bank deposits in the Isle of Man.

A three hour debate ended a short time ago, with voting 21-1 in favour in the House of Keys and 8-0 in the Legislative Council.

Treasury Minister Allan Bell told members the improved package brought in major changes, with which many would be uneasy.

He referred back to the emergency debate a fortnight ago, which saw the approval of the first version of the new scheme, which offers improved protection of up to ?50,000 for individual depositors.

Mr Bell said a number of issues were raised on that occasion (audio file attached):

Mr Bell said the maximum sum of tax payers money which would be needed in the event of a bank failing would be ?150 million.

The minimum levy to be paid by participating deposit takers, the banks, would be ?35,000 - rising to a maximum figure of ?350,000.

The maximum overall contribution of the banks to the scheme would be ?200 million.

Former Treasury Minister David Cannan said it was important the Isle of Man sent out the message it was a responsible financial centre, and would act accordingly, but he felt the new depositors' protection scheme had been put together in too much haste.

He was very critical of the Financial Supervision Commission and said the initial scheme was rushed through and there had been very little consultation with the banks. He said there were still many queries and confusing elements.

Rushen MHK Juan Watterson made a point repeated by many of his colleagues that the Isle of Man and its regulatory system were not to blame for the recent failure of Kaupthing Singer and Friedlander.

He said the days of "leaving banks to the wolves" were gone, and it wasn't 1929!

Governments around the world were flocking to support their banking systems, he said, and it was important the Isle of Man did the same.

Mr Watterson also stressed the Island had not yet had a "bank failure".

Speaker of the House of Keys Steve Rodan suggested that, with the benefit of hindsight, it was no secret that keeping money in Icelandic banks had risks attached.

Eddie Lowey MLC applauded the Treasury for what it had come up with in such a short period of time, and Rushen MHK Quintin Gill spoke of the importance of staying calm in a storm.

He said the financial crisis was not something the Manx government had caused, but it did have to deal with the consequences.

Chief minister Tony Brown said he was disappointed with the contribution of Michael member David Cannan. He referred to "irresponsible statements", which he felt were inappropriate for a former Treasury Minister. He said members should be looking after the Isle of Man, not scoring points.

Liberal Vannin Party Leader Peter Karran said the present situation was not the fault of the Treasury or the Financial Supervision Commission. He said these were dangerous times, and great care must be taken to avoid causing further harm. The finance sector he said needed to be "as firm as Barrule", but there was no question Tynwald was acting properly in the circumstances.

At the end of the debate Mr Bell said the Island was having to pick up a mess made by other jurisdictions, and again made the point the collapse of Singer and Friedlander was not a situation of the Island's own making,

He clarified that the enhanced depositors' compensation scheme - with maximum payments for individual depositors of ?50,000 - would last for 12 months, and would continue at the level of ?20,000 after that.