Icelandic UK assets frozen as British Authorities to lose £1bn

Prime Minister Gordon Brown announced that he would take further action and seize the assets of Icelandic companies over the collapse of the Island’s banks. After the failure of Lansbanki, Kaupthing and Glitni Kaupthing a diplomatic row has began as it emerged that over 100 local authorities have money in Iceland and they are set to lose more than £1 billion. British savers are said to have more than £6 billion in Iceland and British companies could be as much as £12 billion.

It’s likely that the British tax paying the bill to bail out local councils and other public bodies if the Icelandic government does not return the cash to the UK. This would mean the British taxpayer could see steeper council tax bills, The Bank of England have already agreed to use £500 billion of taxpayers’ money in a bid to save the British banks from collapse.

The FTSE-100 closed yesterday 1.2 percent down but shares rose giving us the first sign that the Prime Ministers bail-out plan could be paying off. As of yet, no British Bank has requested any of the £50 billion that is available as part of the bank rescue plan.

Gordon Brown said that the Icelandic government failing to guarantee the return of the money to the UK is unacceptable and that the UK government is freezing the assets of Icelandic companies in the UK where in can, he added that they will do whatever it takes to recover the money the UK is owed.

Source: Telegraph
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