‘Guarantee for UK investors in Icesave’
October 10, 2008 at 12:43 pm
UK investors in the failed Icelandic bank, Icesave, have expressed their relief at the British government’s pledge to ensure that they do not lose any of their money after the Icelandic authorities failed to meet their obligations.
The parent bank Landsbanki was taken over by Iceland on Tues Oct 7th and the 300,000 UK customers of the internet bank were dismayed to find that their accounts had been frozen. Chancellor Alistair Darling said that there appeared to be no funds in the Icelandic compensation scheme.
Whilst the British scheme would provide £50,000 cover, anyone with investments in excess of that figure would have lost out. The government has decided, however, that due to the exceptional circumstances they would ensure that investors got 100% of their deposits back regardless of the amount, and investors in other Icelandic banks have had their savings protected too.
ING Direct, a Dutch bank, has taken on the deposits of UK customers of Kaupthing Edge and Heritable banks in Iceland. Meanwhile, all British assets of the Landsbanki bank have been frozen by the UK government, which has promised to take legal action against Iceland for its failure to meet its compensation obligations. Geir Haarde, Prime Minister of Iceland, a country which depends largely on its banking system for its economic wealth, has spoken of his commitment to finding a "mutually satisfactory" solution.
Meanwhile, it is not clear whether or not local authorities in Britain who have invested in Icesave will be given similar safeguards to those of individual savers.
