PlayIceland crash puts £1bn on the line
Published: Thursday, 9 October 2008, 10:49AM
British investments worth hundreds of millions are on the line after the collapse of Icelandic banks.
Councils, police forces, fire services and charities are facing potential losses of more than £1 billion, according to some estimates.
Prime Minister Gordon Brown hit out at the Icelandic government for its "totally unacceptable" response to the folding of institutions like Landsbanki and Glitnir.
Threatening legal action, he insisted it was the responsibility of Iceland's authorities to reimburse UK investors who stood to lose their deposits.
Chancellor Alistair Darling has promised to guarantee the investments of individual British savers, but ministers are refusing to do the same for public authorities.
Mr Brown said: "This is a problem that has been caused by Iceland. It is totally unacceptable behaviour."
The premier said the Government was trying to freeze the assets of Icelandic banks with branches in the UK.
The Local Government Association has been contacted by 108 councils so far who have invested £798.95 million in Icelandic banks.
Police authorities and fire and rescue services have deposited large amounts of money in what until recent weeks have appeared attractive savings accounts with Icelandic institutions.
Charities are now urgently seeking talks with Mr Darling amid fears that they stand to lose tens of millions.
The Charities Aid Foundation (CAF) said the losses could be "catastrophic" and called on the Government to give full protection for all charity deposits.
The Prime Minister declared that the era of big City bonuses was over and called for bankers who took irresponsible risks to be "punished".
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