Getting our money back from Icelandic banks

November 02, 2011 2:45 PM

Good news potentially for council taxpayers as they look set to get back, finally, their money invested in Icelandic banks that collapsed in 2008. Last Friday’s decision by Iceland’s Supreme Court dismissed an appeal by Glitnir bank’s winding up board against an earlier judgement by the Icelandic District Court in favour of UK depositors.  It now leaves the way clear for councils throughout the South-West and elsewhere to reclaim their money.

‘It’s very good news,’ says Cotswold District Council’s leader, hoping to now recover their £2 million. ‘It will help keep council tax down and help us to protect front line services. Many local authorities had funds with Icelandic banks.’

To keep legal fees down, local authorities have been using one firm of lawyers and estimated that the total legal cost will be below one per cent of the outstanding amount. Gloucester County Council also hope to regain taxpayers’ money from the decision. ‘This will mean the council will be able to recover approximately £10 million, which will be used to pay off some of the council’s debt,’ says their Strategic Finance Director.

The decision includes money deposited in Landsbanki, which was recently looking to sell off some of its assets, including a majority shareholding in frozen food store Iceland. Other South-West councils who hope to regain some of their—I mean, our money—include Somerset County Council that had £25m in Icelandic banks, Plymouth City Council with £13m in deposits in Heritable, Glitnir and Landsbanki, Bristol City Council with £8m invested in Landsbanki, Wiltshire County Council with £8m in Heritable, North Somerset Council with £3m at Landsbanki, and Cornwall County Council with £5m also invested in Landsbanki.

At the time it was claimed that local authorities had not been reckless with taxpayers’ money by chasing higher interest rates advertised in Icelandic banks and depositing over £840m. Many of their highly paid finance directors said that no one could have foreseen the catastrophe coming their way. But that is not true. I recall reading articles in the Sunday Times financial pages earlier in 2008 expressing doubts about the stability of Icelandic banks. So much so that I warned my cousin who had his life-savings in one Icelandic account. He withdrew his money in the nick of time. If I could see it, how come all those other council hired experts didn’t? Surely, that’s what they’re paid for?

Tim Newark, Bath & South-West TaxPayers’ AllianceGood news potentially for council taxpayers as they look set to get back, finally, their money invested in Icelandic banks that collapsed in 2008. Last Friday’s decision by Iceland’s Supreme Court dismissed an appeal by Glitnir bank’s winding up board against an earlier judgement by the Icelandic District Court in favour of UK depositors.  It now leaves the way clear for councils throughout the South-West and elsewhere to reclaim their money.

‘It’s very good news,’ says Cotswold District Council’s leader, hoping to now recover their £2 million. ‘It will help keep council tax down and help us to protect front line services. Many local authorities had funds with Icelandic banks.’

To keep legal fees down, local authorities have been using one firm of lawyers and estimated that the total legal cost will be below one per cent of the outstanding amount. Gloucester County Council also hope to regain taxpayers’ money from the decision. ‘This will mean the council will be able to recover approximately £10 million, which will be used to pay off some of the council’s debt,’ says their Strategic Finance Director.

The decision includes money deposited in Landsbanki, which was recently looking to sell off some of its assets, including a majority shareholding in frozen food store Iceland. Other South-West councils who hope to regain some of their—I mean, our money—include Somerset County Council that had £25m in Icelandic banks, Plymouth City Council with £13m in deposits in Heritable, Glitnir and Landsbanki, Bristol City Council with £8m invested in Landsbanki, Wiltshire County Council with £8m in Heritable, North Somerset Council with £3m at Landsbanki, and Cornwall County Council with £5m also invested in Landsbanki.

At the time it was claimed that local authorities had not been reckless with taxpayers’ money by chasing higher interest rates advertised in Icelandic banks and depositing over £840m. Many of their highly paid finance directors said that no one could have foreseen the catastrophe coming their way. But that is not true. I recall reading articles in the Sunday Times financial pages earlier in 2008 expressing doubts about the stability of Icelandic banks. So much so that I warned my cousin who had his life-savings in one Icelandic account. He withdrew his money in the nick of time. If I could see it, how come all those other council hired experts didn’t? Surely, that’s what they’re paid for?

Tim Newark, Bath & South-West TaxPayers’ Alliance

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