Landsbanki's nationalisation explained

One of Iceland's biggest banks, Landsbanki, was nationalised by the country's government today.









Q: What has happened?



A: The Icelandic Financial Supervisory Authority issued a statement saying the country's government had taken control of Landsbanki. The move follows emergency legislation passed by the Icelandic parliament yesterday, giving the financial regulator the power to dictate banks' operations, including forcing them to sell overseas assets or merge with rivals



Q: What UK brands does Landsbanki have?



A: Landsbanki offers online savings products through Icesave and a range of products including mortgages and savings through Heritable Bank.



Q: What is happening to Icesave?



A: Icesave has a message on its website telling consumers that it is not processing any deposits or any withdrawal requests on its internet accounts. The company is not giving out any information beyond this.



There is speculation that the website may have been shutdown as the Icelandic government is in the process of selling the business, but this is only speculation.



Q: Is my money safe?



A: There is absolutely no reason to think that consumers' money is not safe. Landsbanki has been nationalised, meaning it is now backed by the Icelandic government, it has not collapsed.



In the unlikely event that it does go under, consumers' savings would be protected by up to £50,000 through a combination of the Icelandic deposit compensation scheme and the UK's Financial Services Compensation Scheme (FSCS).



The Icelandic scheme would payout the first €20,887 (£16,170) that people lost. If for some reason it was unable to do this, it has a reciprocal agreement with other Nordic countries who would step in.



The UK scheme would then top-up savers' compensation to the £50,000 limit for sole accounts and £100,000 for joint ones.



Q: How long would it take to get my money back?



A: It is difficult to say, but it is thought the Icelandic scheme would be able to pay out relatively quickly as it is partially pre-funded.



In the UK, the FSCS takes around four months to pay out, although it will pay compensation quicker if possible. A consultation is currently under way looking at getting the scheme to return the bulk of consumers' money to them within a week.



Q: I have money saved with Kaupthing Edge, is it safe?



A: Kaupthing Edge is part of Iceland's biggest bank Kaupthing. The group is reassuring UK consumers that it is financially sound.



Its website contains a message from Kaupthing chairman Sigurdur Einarsson stressing that it had some of the strongest capital ratios in the European banking sector.



Unlike Landsbanki, Kaupthing Edge is registered as a UK bank and regulated by the Financial Services Authority, meaning that in the unlikely event that there was a problem, consumers would receive all of their compensation from the FSCS.



Q: I am really worried about my savings generally, what should I do?



A: These are uncertain times in the banking sector and it is understandable that consumers are worried. However, the recent action taken by the Government suggests it is unlikely to allow a major British bank to fail. In the unlikely event that one does, people's money will be protected up to £50,000 for sole accounts and £100,000 for joint accounts per bank through the FSCS.



The best advice for people who are worried is to make sure they do not hold more than £50,000 with a single banking institution. It is worth noting that this limit applied to banking groups and not individual brands. For example Halifax and Birmingham Midshires are part of the same banking group.



Some savings institutions, such as National Savings and Investments and Northern Rock, are also backed by Government guarantees.



But it is worth remembering that no UK bank has yet failed.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
The Doctor and Clara have their first real heart to heart since he regenerated in 'Deep Breath'
TV
News
people
Life and Style
Apple showed no sign of losing its talent for product launches with the new, slightly larger iPhone 6 making headlines
techSecurity breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
News
The official police photograph of Dustin Diamond taken after he was arrested in Wisconsin
peopleDownfall of the TV star charged with bar stabbing
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

A timely reminder of the bloody anniversary we all forgot

A timely reminder of the bloody anniversary we all forgot

Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

Scarred by the bell

The downfall of the TV star charged with bar stabbing
Why 2014 was a year of technological let-downs

Why 2014 was a year of technological let-downs

Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

Will revolutionary Cuba take 'bourgeois' golf to its heart?

Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

The Locked Room Mysteries

As a new collection of the genre’s best is published, its editor explains the rules of engagement
Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

How I made myself Keane

Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Parting view of Ofcom chief... we hate jokes on the disabled

Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
A look back at fashion in 2014: Wear in review

Wear in review

A look back at fashion in 2014
Ian Herbert: My 10 hopes for sport in 2015. Might just one of them happen?

Ian Herbert: My 10 hopes for sport in 2015

Might just one of them happen?
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?
Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

Finally, a diet that works

Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced