Iceland,the warning signs for councils charities etc.

SouthCoast

I was pleased to read that Brighton & Hove had pulled their money out some time ago. It has a similar population to that of Iceland.

JayTee99_2

edwinac wrote: »

Telford & Wrekin Council apparently foresaw the problems in Iceland, and pulled its cash from Landsbanki over a month ago. Shame they didn't warn anyone else.

it seems that T&W did indeed withdraw it fairly recently, and for the right reasons too.
http://www.shropshirestar.com/2008/10/09/council-avoids-bank-crisis-hit/
but can't please all local taxpayers, i suppose.
They're not crowing about it, it's a two-edged sword really!

Also, if they had made their decision public, can you imagine the sort of responses from various quarters?
going by this forum over the past week, it might have been far from positive..

i'm just amazed that so many local councils, public bodies, charities have been caught up in this mess. Seems like the financial controllers are more concerned with rate chasing than the basic fundamentals of a situation, i.e. safety.

it's little wonder that Alastair Darling is loathe to make any commitment to guarantee their investments until the full extent of the problem comes to light.

Nick_C

opinions4u wrote: »

Becuase they were highlighting the best interest rates offered by organisations authorised to accept deposits in the UK.

Authorised by the powers that be.

Hence a large chunk of the blame lies with the FSA and HM Government.

Totally unfair to blame the FSA. The Icelandic Banks were authorised by Iceland - an EEA member state. The FSA had no choice other than to register them.

The FSA website states

"What about firms not based in the UK?
By law, most financial services firms must get our authorisation before they can do business in the UK. Our Register has information on all authorised firms currently doing business in the UK. The Register includes firms that are UK authorised as well as those authorised in another European Economic Area (EEA) state that also conduct business in the UK.
If you are considering or currently doing business with a firm authorised in another EEA state you should ask for further information from the firm or its UK branch about its complaints and compensation arrangements. This is because the position may differ compared to a UK authorised firm.

opinions4u

Nick_C wrote: »

Totally unfair to blame the FSA. The Icelandic Banks were authorised by Iceland - an EEA member state. The FSA had no choice other than to register them.

The FSA website states

"What about firms not based in the UK?
By law, most financial services firms must get our authorisation before they can do business in the UK. Our Register has information on all authorised firms currently doing business in the UK. The Register includes firms that are UK authorised as well as those authorised in another European Economic Area (EEA) state that also conduct business in the UK.
If you are considering or currently doing business with a firm authorised in another EEA state you should ask for further information from the firm or its UK branch about its complaints and compensation arrangements. This is because the position may differ compared to a UK authorised firm.

Reasonable point. But that surely places a responsibility on the FSA to ensure UK based savers are protected in the best way possible. But then the FSA has been far more concerned about ensuring I get 37 pieces of paper with an insurance quote than providing genuine protection for customers.

k8r4u

halight wrote: »

Why are our coucils putting our money into banks abrourd?????
Should thay not be sorpoeting british banks and bussiness?
Were i live our green whiley bins and black boxs for our paper and bottles come from a french company and are made in franch. But just up the road from were i live there is a company that make them.
Its about time we put our maney into our incomany!

The councils are to blame for putting our monay at risk in a non british bank not us so thay should be made to find ways to make the money back with ouy charging us more coucil tax

Welcome to the UK (I assume you've just arrived). It's because:
British banks offered poorer returns on the investment, at what appeared to be the same risk (that hasn't gone away remember);
Our manufacturing base went abroad twenty years ago;
Our natural resources are too expensive to extract;
The average wages and standard of living are far too high across the whole economy;
The cost of producing anything in this country exceeds the cost of buying it abroad and shipping it in;
etc.etc.

Would you have preferred them (with your 20:20 hindsight) to have put it at risk in a British Bank ? Maybe Alliance & Leicester ? Oh sorry, it's Spanish. I know, what about HSBC ? Woops, sorry again, Chinese. Northern Rock ? B&B ? HBOS ? RBS ? Any of the other basket cases ?

silvercar

Why have local authorities been investing loads of dosh? They are not meant to be making a profit but proding services.

cepheus

Prime Minister Gordon Brown announced that he would take further action and seize the assets of Icelandic companies over the collapse of the Island’s banks. After the failure of Lansbanki, Kaupthing and Glitni Kaupthing a diplomatic row has began as it emerged that over 100 local authorities have money in Iceland and they are set to lose more than £1 billion. British savers are said to have more than £6 billion in Iceland and British companies could be as much as £12 billion.
It’s likely that the British tax paying the bill to bail out local councils and other public bodies if the Icelandic government does not return the cash to the UK. This would mean the British taxpayer could see steeper council tax bills, The Bank of England have already agreed to use £500 billion of taxpayers’ money in a bid to save the British banks from collapse.
The FTSE-100 closed yesterday 1.2 percent down but shares rose giving us the first sign that the Prime Ministers bail-out plan could be paying off. As of yet, no British Bank has requested any of the £50 billion that is available as part of the bank rescue plan.
Gordon Brown said that the Icelandic government failing to guarantee the return of the money to the UK is unacceptable and that the UK government is freezing the assets of Icelandic companies in the UK where in can, he added that they will do whatever it takes to recover the money the UK is owed.

http://www.100mortgages.org/20081010/icelandic-uk-assets-frozen-as-british-authorities-to-lose-1bn/

1) So how much are these Icelandic 'seized assets' in the UK worth?
2) Is is legal to sell them off to compensate those organisations who have shortfalls arising from Icelandic banks folding?

Perhaps there is no problem, beyond a temporary loan?

pem2

It seems almost everyone and his/her dog in the UK has deposited money in Icesave/Kaupthing etc as now Chelsea BS has declared that it has put 55million in two banks, but I'm interested to know who were the major borrowers.

beingjdc

silvercar wrote: »

Why have local authorities been investing loads of dosh? They are not meant to be making a profit but proding services.

They don't make a profit - where would it go? It's all spent again or used to increase tax by less. But obviously they have money inbetween people paying tax and wages going out, and a reserve for emergencies like floods, foot and mouth, schools catching fire, etc. Don't you think they should get the best return they can while they have that money, to reduce the cost to the taxpayer?

chopperharris

Did the councils not learn after bcci.

did the ukgovtplc not take measures for this to not happen again back then.

perhaps the only way forward for charities and councils and the like is to have legislation there for them in the form of only having nsi saving accounts in the future.True its not the best interest rates but at least its garunteed 100 percent.

sometimes the best rate just isnt the best option.

wont be long now til the council tax increases to cover the councils losses.But why , or how, did they have money to spare in the first place if they have been pleading poverty with cutting services?