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Brown sues Iceland's gov't over savings fiasco
31May2008
Posts: 23 Forumite
from bloomberg:
"Prime Minister Gordon Brown said Britain will sue Iceland over deposits belonging to 300,000 U.K. account holders with the Icesave Internet bank after its parent, Landsbanki Islands hf, was placed in receivership.
``We are taking legal action against the Icelandic authorites,'' Brown told journalists at 10 Downing Street today.
Chancellor of the Exchequer Alastair Darling said the government will also guarantee all customer deposits at Icesave, even those above the U.K.'s 50,000 pound ($87,800) deposit protection plan. Iceland is refusing to meet its guarantees, Darling said.
``The Icelandic government, believe it or not, have told me yesterday they have no intention of honoring their obligations here,'' Darling told the British Broadcasting Corporation.
``The first call would be on the Icelandic compensation scheme which, as far as I can see, hasn't got any money in it,'' he added.
The government's promise to compensate depositors with more than 50,000 pounds meets its pledge that no individual should lose money as a result of the banking crisis. The pledge covers about 15,000 savers, the Financial Times reported.
The credit crunch has halted interbank lending, raised the cost of borrowing and cost financial firms worldwide $585 billion in losses and writedowns.
`Seeking Clarity'
The Financial Services Authority said it's ``still seeking further clarity'' from Iceland's regulator. Calls to two British Treasury spokesmen were unanswered. The Icelandic government told Bloomberg News it was not immediately able to comment.
In a separate announcement, ING Groep NV, the biggest Dutch financial-services company, agreed to buy more than 3 billion pounds ($5.24 billion) of U.K. retail deposits at two other Icelandic banks.
ING will acquire 2.5 billion pounds of deposits from a unit of Kaupthing Bank hf, known as Kaupthing Edge, and 538 million pounds from Landsbanki's Heritable Bank division, it said in a statement today.
Landsbanki, which gets 60 percent of its deposits from U.K. and offshore customers, expanded into Britain to increase funding from retail deposits.
Brown and Darling today announced a banking rescue package that will provide up to 50 billion pounds to British lenders by buying stakes.
The Bank of England will also make at least 200 billion pounds available for banks to borrow under the so-called special liquidity plan.
"Prime Minister Gordon Brown said Britain will sue Iceland over deposits belonging to 300,000 U.K. account holders with the Icesave Internet bank after its parent, Landsbanki Islands hf, was placed in receivership.
``We are taking legal action against the Icelandic authorites,'' Brown told journalists at 10 Downing Street today.
Chancellor of the Exchequer Alastair Darling said the government will also guarantee all customer deposits at Icesave, even those above the U.K.'s 50,000 pound ($87,800) deposit protection plan. Iceland is refusing to meet its guarantees, Darling said.
``The Icelandic government, believe it or not, have told me yesterday they have no intention of honoring their obligations here,'' Darling told the British Broadcasting Corporation.
``The first call would be on the Icelandic compensation scheme which, as far as I can see, hasn't got any money in it,'' he added.
The government's promise to compensate depositors with more than 50,000 pounds meets its pledge that no individual should lose money as a result of the banking crisis. The pledge covers about 15,000 savers, the Financial Times reported.
The credit crunch has halted interbank lending, raised the cost of borrowing and cost financial firms worldwide $585 billion in losses and writedowns.
`Seeking Clarity'
The Financial Services Authority said it's ``still seeking further clarity'' from Iceland's regulator. Calls to two British Treasury spokesmen were unanswered. The Icelandic government told Bloomberg News it was not immediately able to comment.
In a separate announcement, ING Groep NV, the biggest Dutch financial-services company, agreed to buy more than 3 billion pounds ($5.24 billion) of U.K. retail deposits at two other Icelandic banks.
ING will acquire 2.5 billion pounds of deposits from a unit of Kaupthing Bank hf, known as Kaupthing Edge, and 538 million pounds from Landsbanki's Heritable Bank division, it said in a statement today.
Landsbanki, which gets 60 percent of its deposits from U.K. and offshore customers, expanded into Britain to increase funding from retail deposits.
Brown and Darling today announced a banking rescue package that will provide up to 50 billion pounds to British lenders by buying stakes.
The Bank of England will also make at least 200 billion pounds available for banks to borrow under the so-called special liquidity plan.
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Comments
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This is exactly what is needed. The Iceland government is avoiding putting Icesave into bankruptcy in order to avoid triggering the compensation scheme.
Only legal action can force their hand. The proper method would be all Icesave customers to launch the legal action, but having the UK government do it is likely to get a faster result.0 -
This is exactly what is needed. The Iceland government is avoiding putting Icesave into bankruptcy in order to avoid triggering the compensation scheme.
Only legal action can force their hand. The proper method would be all Icesave customers to launch the legal action, but having the UK government do it is likely to get a faster result.
The risk is the political or legal arguments between UK and IS could rangle on for many months, or even years, as both governments play pass-the-parcel with their moral and legal responsibilities."If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks will deprive the people of all property until their children wake up homeless on the continent their fathers conquered."
-- Thomas Jefferson0 -
Also please see this thread:
http://forums.moneysavingexpert.com/showthread.html?t=1206707You're spelling is effecting me so much. Im trying not to be phased by it but your all making me loose my mind on mass!! My head is loosing it's hair. I'm going to take myself off the electoral role like I should of done ages ago and move to the Caribean. I already brought my plane ticket, all be it a refundable 1.0 -
AND read this news report
http://news.bbc.co.uk/1/hi/business/7658417.stm
Chancellor Alistair Darling has said he will ensure all UK savers with accounts in the closed Icelandic internet bank Icesave get all their money back....0 -
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The risk is the political or legal arguments between UK and IS could rangle on for many months, or even years, as both governments play pass-the-parcel with their moral and legal responsibilities.
Surely we'll get our money before it's resolved though. That's why the government plans to pay us rather than forcing Iceland through suiing. It will then be the government that is owed by the bank and not us.0 -
Chancellor Alistair Darling has said he will ensure all UK savers with accounts in the closed Icelandic internet bank Icesave get all their money back.0
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Hi,Also please see this thread:
http://forums.moneysavingexpert.com/showthread.html?t=1206707
Thanks for that, I've merged these threads on the same topic
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The governemnt is moving to freeze Icelandic assets in the UK with a view to seizing them if they don't pay up. Quite right too.
EDIT - good move merging threads, I approve. But in case anyone was wondering this post was a response to one that's way back there now because it merged while I was replying.0
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