Print the PMS investors' money.

Last week, Shadow Sectretary of State, Owen Paterson, conducted an exchange with Paul Goggins, the NIO’s Minister of State, about the fate of PMS savers. The transcript can be read here.

To digress briefly, apart from Paterson’s questions, you can also sample the horrendous, obsequious attitude of Sylvia Hermon to Goggins and his superior, Shaun Woodward.

“Excellent ministers for Northern Ireland”! On what planet does this woman live? Thoroughly inaccurate and cringe-making, at the same time!

One of the controversies these ‘excellent ministers’ have presided over is the failure to reimburse Presbyterian Mutual investors, rendering them, thus far, the only British savers who have lost out, because of the banking crisis.

Paterson promises a Conservative secretary of state will “stand up for the people of Northern Ireland” as regards this issue. I hope he is right. One group which has suggested a possible solution to the PMS situation is the Cobden Centre.

In today’s Belfast Telegraph I applaud the Centre’s intervention for its imagination.

The Cobden Centre, spearheaded by seafood entrepreneur Toby Baxendale, is keen to see the Bank of England issue new notes and coins to PMS investors who currently cannot access their money. Any inflationary effect would be mitigated by erasing deposits and allowing the Government to recover the society's investments, to set against the national debt.

So far, the First Minister and deputy First Minister have indicated that they envisage three possible ways out of the Presbyterian Mutual's predicament.

They would prefer a commercial buyer for the society to emerge, underwriting deposits which are currently frozen.

A 'Northern Ireland solution' has been mooted, but it is an ironic label, because it can only take place if the Treasury provides a bailout.

Finally, the least satisfactory option would set up a hardship fund in order to alleviate the worst effects of the collapse and compensate the most needy investors. The Cobden Centre is proposing a fourth option, injecting imagination into a debate which has become focussed on passing the buck.

A recent report by the Treasury Select Committee suggested that the Executive should bear responsibility for failing to identify a regulatory loophole which rendered the PMS vulnerable.

It drew a predictable response from Peter Robinson and Arlene Foster, whose department Westminster accuses of being asleep at the wheel.

Presbyterian Mutual customers are less interested in apportioning blame than in recovering their hard-earned money. After all, even savers with the collapsed Icelandic banks were eventually refunded from the public purse.

On the Cobden Centre website, Baxendale argues that the Bank of England can print money to cover PMS savings, without creating excess inflation.

Instead, the Mutual's deposit books could simply be wiped clean and loans which it made to property developers and buy-to-let entrepreneurs could be recovered by the Treasury.

Although the society operated under an exemption from the FSA, by the time of its demise, it engaged in investment activities similar to those which precipitated the banking crisis in the rest of Britain. Therefore, when investors began to withdraw cash, with confidence plummeting, the PMS's reserves became dangerously depleted.

The Cobden Centre believes that the Presbyterian Mutual offers a lesson for the entire financial sector in the UK. It is pressing for legislation which would require banks and building societies to hold more of their deposits in reserve. Depositors should have a greater say on the level of risk to which their savings are subjected.

Of course, interest rates would be adjusted accordingly but, the centre insists, it is the customer who must decide whether his/her money should be kept safe in a vault.

The current regulations encourage a 'credit overhang' with only a fraction of savers' money available to a bank or building society at any given time.

When the PMS went under, it had £5m cash against £310m deposits which could, by the society's own rules, be requested on demand.

Northern Rock, the Royal Bank of Scotland and other institutions operated with similar imbalances, but they were deemed 'too big' to fail. It is not difficult to understand, given the sums involved, how the panic which engulfed PMS savers had such calamitous consequences.