Treasury grab £4bn Ice lolly
We beat Iceland to assets to boost money woes
BRITAIN has grabbed more than £4 BILLION from Iceland's collapsed banks - enough to pay back every SAVER, CHARITY and COUNCIL with cash frozen after the crash.
Treasury officials secured the lolly in the nick of time . . . just beating the Iceland government, which wanted to claw back the British depositors' money to pay their own people.
Now Chancellor Alistair Darling will use the cash as a bargaining tool.
British savers and institutions have up to £3 BILLION locked up in the failed banks - and only when a deal has been done to repay that will the rest be returned to Iceland.
Savers will be the first to get their money back, with a deal expected within the next 72 hours. But councils, charities and other companies will have to wait longer.
The asset grab - made under anti-terror laws - had angered Iceland's politicians. But last night there were signs of a thaw between the two countries as talks aimed at resolving the situation got underway in Iceland's capital Reykjavík.
The two governments issued a joint statement saying they had made "significant progress" towards a deal. And last night Mr Darling persuaded other world finance ministers to follow Britain in part-nationalising banks and pumping money into the financial markets.
Guarantee
In a five-point plan, the G7 group of the world's richest nations, meeting in Washington, agreed to:
- SAVE banks from collapse.
- PUMP taxpayers' money into the money markets to get them trading again.
- BUY shares in banks and other institutions to stop them collapsing.
- GIVE stronger protection for savers, guaranteeing their money is safe.
- FORCE banks to come clean on the true scale of their losses.
Today PM Gordon Brown will meet leaders of the Eurogroup - countries who use the euro-after their failure last week to sort out a deal on the financial crisis.
That caused a panic on stock markets, plunging the FTSE on Friday into its biggest drop in 21 years.
Now they are desperate to stitch together an agreement before the world's financial markets open again tomorrow - and have asked the Prime Minister for a briefing on his economic rescue plan.
And Bhs and Topshop boss Philip Green was last night looking to invest up to £2 billion to save troubled Icelandic retailing group Baugur, whose British stores include House of Fraser, Karen Millen and Hamleys.
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This article has 10 comments
Responding to Ian:
Only an idiot would blame Mrs Thatcher for selling off the utility companies. These companies were loss making when they were in public ownership. It's the current Labour government's fault that they are being sold to the French with their over-regulation and over-taxation of UK firms. Talk of retrospective windfall taxes for UK energy companies is not helpful either.
Remember, you can't buck the markets.
By Gary. Posted October 13 2008 at 12:21 AM.
Ian, Strangely enough I met someone this afternoon who was in just such a position with one of these banks. I didn't call them a fool more for respect of their feelings than fear of a punch in the mouth. Talking of bottle I bet Hero Gordon wouldn't have had the nerve to do this to Germany or the US. We might find out in the near future.
By Simon. Posted October 12 2008 at 8:02 PM.
BELIEVE IT WHEN I SEE IT.
NULABOUR 'PROMISES' AREN'T WORTH ANYTHING.
NOTICE THEY AREN'T TELLING YOU WHEN YOU WILL GET YOUR MONEY BACK - THEY DON'T SAY THIS YEAR, THEY DON'T SAY NEXT YEAR, THEY DON'T SAY ANY YEAR...
SO DRAW YOUR OWN CONCLUSIONS...
By ROGER . Posted October 12 2008 at 6:15 PM.
Simon,
If you opened your eyes you would see the whole world is in financial ruin, so it is wrong to call the icelandic bank a dodgy bank.
I wasn't a G.Brown fan, but he has gone up in my estimation the way he has put Iceland in its place.
By the way I don't have any money invested in the Icelandic Bank, but I'm proud of Gordon for fighting our corner because I'm sick of other countries abusing our good nature. I reiterate my point that you wouldn't have the nerve to express your views face to face with those who risk losing their investments but find it all too easy to hide behind the anonymity the internet provides.
You are a do gooder challenging G.Browns decision, whereas you have no valid reason to call me one.
By Ian. Posted October 12 2008 at 5:08 PM.
Nobody has mentioned the depositors who have money frozen in accounts with Landsbanki Guernsey, and are not covered by any compensation scheme because they are offshore.
Yet when Bradford and Bingley were bought out by the Abbey, the government compensated their offshore customers.
Surely the Treasury set a precedent then and should pay out to us.
By Judy. Posted October 12 2008 at 1:44 PM.
Responding to Ian. Me? Do Gooder? I don't think so. As far as I'm concerned anyone stupid enough to put their money in a dodgy Icelandic internet bank can take their chances. If they lose the lot that's their problem. You, Ian, are the do gooder with your little nanny state bailing these stupid investors out. Don't like the real world of investment? Nanny Brown will bail you out. Going to vote for Nanny Brown next time in return are we? She'll look after you and make sure you don't have the freedom to make mistakes about where you put your money in the future. It'll be Premium Bonds or nothing for you. What's happened to the English? Used to be men of the world, now they've turned into a bunch on nannied wimps who can't stand on their own two feet.
By Simon. Posted October 12 2008 at 1:06 PM.
Responding to Simon:
Simon you are typical of the do gooders in this country. Try telling the british savers who nearly lost money in the Icelandic banks face to face your opinion.
The only country not to be trusted in future is Iceland. As for international investors no longer investing in this country I wish it would happen, because I am sick of the French buying all our PROFIT MAKING utility companies & screwing the nation with above inflation water, gas & electric increases.
M.Thatcher has alot to answer for selling off these companies.
By Ian. Posted October 12 2008 at 9:49 AM.
Terrorists attack the ordinary people of a country for their own ends.
Iceland government has attacked the ordinary British people for its own financial ends therefore the British government was right to use terrorist laws to protect its ordinary people's financial situation.
By Derrick Garner. Posted October 12 2008 at 9:28 AM.
Looks like Gordon Brown has found a backbone!
Why not use anti-terrorism laws, it worked, just like all the people who aren't supposed to be in Britain using the human rights law.
Shame we can't use it against every other country that takes us for a mug!
As for no trust from other countries, so what! We don't have their respect either!
By Andy. Posted October 12 2008 at 9:26 AM.
Using the terrorism laws to do this was wrong. International investors will no longer trust this country. Look at the Russian markets after they did this to outside investors. People pulled their money out of Russia very quickly causing the markets to collapse. It might seem clever in the short term but international trust and confidence is worth more than £4 billion.
By Simon. Posted October 12 2008 at 5:31 AM.