Treasury tells Iceland, ‘We want our money back’
October 11th, 2008 | by Lynn Connelly |A hastily formed delegation of Treasury officials has arrived in Iceland to secure assurances that UK investors will not lose their money as a result of its banking crisis.
The meetings follow heated exchanges between Gordon Brown and his Icelandic counterpart, Geir Haarde, about the crisis.
The UK officials are expected to demand that the £1bn in funds that was invested by councils and other public groups in the collapsed Icelandic banks must be recovered quickly.
Mr Brown vowed to do, “everything in his power” to see that the public money was secured. He said that UK authorities were continuing to investigate where British deposits were being held and expected the full co-operation of Iceland’s government.
A Treasury spokesman said they wanted to “find a solution” to the crisis which will protect UK depositors and enable councils who have money at stake to reclaim it as quickly as possible.
Government officials and representatives from the Bank of England – as well as the Financial Services Authority – will spend the weekend in talks to tackle the crisis and hope to defuse a row between the UK and Iceland.
Following the Icelandic government’s decision to take control of three of its leading banks, Gordon Brown condemned the government’s failure to guarantee the safety of UK deposits. He said that Iceland’s actions were “effectively illegal and completely unacceptable”
Alistair Darling also announced that all UK savers who have been affected by the crisis “will be protected” and he said he has taken measures to protect deposits held at Iceland’s Heritable and Kaupthing banks. The Treasury officials also want to find out how soon customers of online bank IceSave will be able to access their money after its parent bank Landsbanki collapsed.
The UK government froze all the UK assets of Landsbanki after it collapsed and threatened to take similar action against other Icelandic companies in the UK because of worries about the detrimental effect of Iceland’s banking crisis on the UK economy.