Council cash will be repaid
Monday 8th June 2009, 11:23AM BST.
Millions of pounds worth of compensation paid out by the Government to UK depositors during the Icelandic bank crisis will be repaid, it has emerged.
Britain has secured agreement from the Icelandic authorities to repay the £2.3 billion paid out by the Government.
More than 100 local authorities – including Powys County Council and Bridgnorth District Council – were left facing potential losses of millions invested in collapsed Icelandic banks last year.
Powys County Council had £4 million invested in two Icelandic banks – the Landsbanki and the Glitnir – which went into receivership in the global financial crisis. Bridgnorth District Council had a deposit of £1 million invested with one of the banks – Landsbanki.
Dyfed Powys Police also confirmed it had £2 million deposited in UK subsidiaries.
The repayment deal was announced in a joint statement by the governments of Iceland, Britain and the Netherlands.
There will be an initial seven year “period of grace” in which payments will be made only from the UK assets of Icesave’s parent bank, Landsbanki, which the Government froze following the collapse of the Icelandic banks last October.
A Treasury spokesman said that the agreement, which will pay back taxpayers’ cash, was “good news” for both Britain and Iceland.
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