The Financial Services Authority (FSA) will come under attack from MPs today for failing to carry out an inquiry after the collapse of Icelandic banks.

The Communities and Local Government Select Committee is furious that the FSA has chosen not to meet its demand for an investigation into losses suffered by local authorities with the banks.. .

Auditors have told councils that they can expect up to 80 per cent of the money back eventually, but no guarantees have been given and each Icelandic bank is operating separately. This means that at least £200 million is unlikely to be returned. The bulk of the cash — £630 million — went to Glitner Bank and Landsbanki, which have not started to process claims. 28-Oct-09.

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