The Mudcat Café TM
Thread #114937   Message #2460941
Posted By: Emma B
09-Oct-08 - 07:34 AM
Thread Name: BS: So it has come to this - Iceland
Subject: RE: BS: So it has come to this - Iceland
As a pensioner living in a rural area with very high local council tax that observation has considerable resonance Shimrod.

'Local authorities appealed to the government Wednesday to guarantee hundreds of millions of pounds of their savings invested in moribund Icelandic banks.

The calls from local councils -- responsible for cultural provisions, refuse collection and other social services -- came just a day after London threatened to take legal action against Iceland to ensure that individual British depositors had their savings returned.

One local authority, Kent County Council, has 50 million pounds deposited in Landsbanki's British subsidiary Heritable as well as Glitnir Bank.

Transport for London, the agency responsible for the capital's public transport, has a further 40 million pounds invested with Kaupthing Singer and Friedlander.'

Dorset County Council has temporary loans in Icelandic banks totalling £28.1 million.

The crisis does not cause "significant cash flow problems" in the short term, Dorset council said, but there would be budget implications if the cash is not recovered.

The Local Government Association said it had identified more than 20 councils in England and Wales with money deposited in Landsbanki's UK operations, including Heritable while some early reports give the figure as high as 40.

U.K. taxpayers will probably face a bill of at least 2.4 billion pounds ($4.1 billion) to compensate about 300,000 U.K. holders of accounts at Icesave, a unit of Landsbanki, the Financial Times reported.

The Local Government Association has called on Chancellor of the Exchequer Alistair Darling to extend the individual depositor savings guarantee to councils as well running to '10s of millions of pounds'