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UK News

This page contains brief summaries of and links to media reports on the topic of UK News.

UK freezing of Landsbanki assets 'as damaging to Iceland as Treaty of Versailles'

The bitter state of relations between Iceland and Britain over the collapse of Icesave has emerged in official documents warning the UK that it was inflicting damage equal to the Treaty of Versailles.

A diplomatic row erupted between the two nations after Landsbanki, the parent bank of Icesave, failed last October affecting 300,000 British savers. .

A senior Treasury adviser, Clive Maxwell . . . said too many of Landsbanki's assets had been put into a new bank for domestic customers. This left creditors of the old bank – such as UK charities and councils – with fewer assets to cover their claims. 06-Jul-09.


Brown Justifies Use of Anti-Terrorism Act on Landsbanki

The UK was right to use the Anti-Terrorism, Crime and Security Act of 2001 to freeze the assets of Landsbanki in the UK in October 2008, British Prime Minister Gordon Brown wrote in response to a letter from his Icelandic counterpart, Jóhanna Sigurdardóttir.

However, in the letter, which Fréttabladid has a copy of, Brown also states that he will review the report undertaken by the Treasury Committee of the UK Parliament, criticizing the implementation of the anti-terrorism legislation, and react accordingly . . .

. . . Brown’s response was sent on April 24 but hasn’t been made public until now. He agreed with Sigurdardóttir on the importance of solving the Icesave dispute and that Iceland honor its obligations. He also mentioned tax havens and that his Treasury had invited Iceland to bilateral discussions on that subject.  16-Jun-09.

UK authorities lift freezing order on Landsbanki assets

British authorities today revoked the October 2008 Freezing Order on the assets of Landsbanki in Britain, wich were set using anti-terrorism legislation. This follows an agreement of 5 June between Icelandic, British and Dutch authorities, according to which the Icelandic Depositors' and Investors' Guarantee Fund will reimburse the UK and the Dutch Governments the amounts paid out to eligible depositors of the Icesave accounts in accordance with the EU Deposit Guarantee Scheme (up to 20,887 EUR per deposit).  The Icelandic Government Information Centre website 16-Jun-09.

Gordon Brown Spills the Beans on the IMF

Last month the G-20 authorized the International Monetary Fund to increase its loan resources to $1 trillion. It’s not hard to see why. . .

. . . It is supposed to be merely incidental that the largest IMF shareholders, the United States and Britain, happen to be the major creditor nations and their banks the main beneficiaries of IMF loans. But in a Parliamentary question-and-answer session on May 6, Britain’s Prime Minister Gordon Brown spilled the beans. Under pressure for his notorious “light-touch regulation” as Chancellor of the Exchequer (1997-2007), he undid half a century of rhetorical pretense by announcing that he was pressuring the IMF to bail out Britain in its nasty dispute with the Icelandic owners of a British bank that went under.  Counterpunch website - 11-May-09.

Treasury paid £7.4bn to Iceland savers

The Treasury has revealed that it was forced to pay out £7.4bn to savers who lost their money in the Icelandic banking crisis last year.

The Government stepped in to help more than 300,000 UK savers with Iceland's biggest banks, after Kaupthing and Landsbanki collapsed last October. Figures released in Wednesday's Budget, show that the Treasury had to give £3.3bn to savers with money in Kaupthing Singer & Friedlander and Landsbanki's Heritable Bank, while compensation is expected to reach £4.5bn for savers with money in Icesave accounts. 24-Apr-09.

Iceland payback delay warning

Councils with money frozen in Iceland's Heritable Bank should gain up to 80% of their deposits back — but they will have to wait until 2012 to receive the best return.

The authorities will effectively forfeit cash by receiving what is left of their deposit sooner, said a report published by the bank's administrators Ernst & Young on the 17th April 2009. . .

. . . Heritable has to adhere to UK insolvency laws, which require auditors to produce a report after six months, but there are no such rules governing the Iceland-based banks.

The proportion of returns from Landsbanki and Glitnir will depend on whether councils secure 'preferential creditor status', which the LGA is optimistic about. Local Government Chronicle website - 23-Apr-09.

PM’s tax plan easier said than achieved

GORDON Brown’s plans to crack down on tax avoidance will be difficult to achieve, according to Chief Minister Lyndon Trott. ‘It seems to me that the Prime Minister and HM Treasury are attempting to impose a new set of standards in relation to tax avoidance,’ said Deputy Trott.

‘However, while this has been the goal of many governments or tax administrations, it is difficult to achieve in practice for a variety of reasons.  17-Apr-09.

Landsbanki action group joins fray with calls to blacklist Guernsey

Around 150 depositors in failed bank Landsbanki Guernsey joined the G20 protest outside the Bank of England to call for Guernsey to be placed on a tax haven blacklist.

The protesters want Guernsey to be added to the blacklist drawn up by world leaders at the G20 London Summit stating that it is an unsafe jurisdiction because of its refusal to protect deposits in the Icelandic-owned Landsbanki.  07-Apr-09.


Savers who lost money in Iceland are snubbed

Charities should be compensated for losses they incurred in the collapse of Iceland’s banking sector — but consumers should not be helped, an influential group of MPs has recommended.

The Commons Treasury Select Committee said the government should compensate charitable organisations, but that it shouldn’t fall on the taxpayer to repay losses that citizens and local authorities incurred when Isle of Man and Guernsey subsidiaries of the Icelandic banks went under.

An action group set up to lobby for compensation for those who lost millions of pounds when the Guernsey arm of Landsbanki collapsed last October reacted angrily at the ruling. 05-Apr-09.

Iceland report a timely reminder that no regulatory system can be foolproof

It's not often that the working of our Financial Services Compensation Scheme (FSCS) makes for essential reading but the meltdown of the likes of Landsbanki and Kaupthing reveals details of one of the most dramatic stories of the credit crisis. . .

. . . Anyway, the lessons that savers should draw from the report are that the UK Government is not there to compensate British citizens who wander off into the wilder climes of finance in search of higher interest rates and what's good for a bank's shareholders is not necessarily good for a bank's customers – in fact, it can be downright damaging.  04-Apr-09.

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