Icesave say no to 300,000: Landsbanki into receivership

Oct 07, 2008 | Comments 4

As Landsbanki gets swept up by the Icelandic government the British banking customers for the first time could see themselves applying to get their savings back.

News comes a Icesave who’s parent company is Landsbanki have frozen all UK saving accounts. If you are worried about your savings if you do have money in the internet bank Icesave the Iceland’s Prime Minister Geir Harade has said that he believes there is enough assets cover the reported 300,000 UK customers, despite the receivership of Landsbanki.

Landsbanki is Iceland’s second largest financial institution, and new regulatory powers have come into force now it’s been nationalized. Icelandic Banks Deposit insurance says that up to £50,000 of UK customers savings are protected, and that the first £16,170 of the customers money is protected by Iceland and the remaining £33,830 is protected by the British Government, it goes on to say that if Iceland goes bankrupt, the UK will not cover the first £16,170, if you have a joint account then you will be protected up to £100,000.

As emergency talks happened over the last few weeks as Iceland’s economy on the brink of meltdown, Geir Haarde warned that the country could face national bankruptcy. The currently market was also damaged with the value of the Icelandic crown down 35 percent against the Euro. The nationalization of Landsbanki is seen as the first step in ensuring the banking stability in Iceland.

Source: Sky

Filed Under: Mortgage News

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  • Will

    We have our life pension savings in Icesave. Everyone is talking about compensation, but what about people like us who have invested in what we thought was a safe haven of cash and now have the possibility of losing all we have worked and saved for! We just hope our government also see this as a problem and step in to support these investors over and above the £50k figure so far mentioned. After all, the government ate quick enough to take their 40% slice of any interest we earn!!

  • Silas

    Will: the rules on compensation have been very clear for a very long time. Whilst it is very unfortunate if you do lose money, if you put all your eggs in one financial basket, above the level protected by the government, then you were taking a gamble.

    I do note, however, that you say “we”. If this is a joint account then you should be covered (I believe) to twice the individual level, i.e. £100,000 and not just £50,000.

  • Ann

    If you put your money in foreign banks for that little bit more interest, your deposit should not be guaranteed
    by British tax payers. If you take your money out of the country or invest in banks who do so, you are not contributing to this country and it should not be obligated to provide insurance at our expense.
    Councils are idiots and should have to suffer the consequences. They shoud put their money into UK banks and building societies.
    Anyone who continues to save money in cheap foreign internet accounts must learn their lesson and learn money doesn’t come for nothing.
    I want to see ICICI and Ing also shut down.

  • Will

    Firstly, Silas, I appreciate and indeed accept what you say, but without going into actual numbers, let’s say I was looking to invest 5 million and obviously wanted the safe haven of investor protection? 1. Try opening new accounts with high street UK banks, building societies these days! 2. try finding 100 of them who look to have decent stability, aren’t inter related (where your guarantee is then limited to 50k? Very tough. We decided to choose 4 individual institutions, 3 of which were UK institutions and Icesave who were run under FSA guidelines, so we thought we had done what was reasonable and sensible.
    Lastly, to Anne and her comments. You really should have been shot at birth!! With such outrageous statements, you clearly have no idea about how the inter banking monetary system works and I guess have no money to invest. If you had, you may have understood how people are feeling!