Worries for UK internet savers as Icelandic bank is nationalised

Suggested Topics

Internet bank Icesave today stopped savers withdrawing their cash after its parent company was nationalised by the Icelandic government.





The Icelandic Financial Supervisory Authority issued a statement saying the country's government had taken control of Landsbanki.



It sought to reassure domestic savers that their money was fully guaranteed by the government, adding that domestic branches, call centres, cash machines and internet operations would be "open for business as usual".



But the guarantee does not extent to UK savers and people logging on to Icesave's website were greeted with a message telling them that the group was not currently processing any deposits or any withdrawal requests on its internet accounts.













The nationalisation of Landsbanki is the latest twist in the financial turmoil which is sweeping the world.

Fears over the health of Icelandic banks had been growing in recent weeks as the country wrestled to maintain stability in its financial sector.



Iceland's prime minister Geir Haarde warned yesterday that the island faced the "real possibility" of "national bankruptcy", as its economy could be sucked into the "global banking swell".



His comments came as the country's parliament passed emergency legislation yesterday in an attempt to restore stability to its banking system, while trading in the country's six biggest financial institutions was temporarily halted.



Under the legislation, Iceland's financial regulator will have the power to dictate banks' operations, including forcing them to sell overseas assets or merge with rivals.



The Icelandic Financial Supervisory Authority said in its statement that the nationalisation of Landsbanki was "a necessary first step in achieving the objectives of the Icelandic government and parliament to ensure the continued orderly operation of domestic banking and the safety of domestic deposits".



It is not known how many UK consumers hold money with Icesave, but it is thought that as many as 300,000 people in this country have savings with an Icelandic institution.



Money is mainly held with Icesave and Kaupthing Edge, the UK retail arm of Iceland's biggest bank Kaupthing.



If an Icelandic bank failed, savers would still have the first £16,170 of their money protected under the Icelandic savers compensation scheme, with the sum topped up to £50,000 for individuals, or £100,000 for joint account customers, by the Financial Services Compensation Scheme (FSCS).



Independent Comment
blog comments powered by Disqus
Career Services

Day In a Page

Couture on the Croisette: Fashion hits

Couture on the Croisette

The best outfits from the 2012 Cannes Film Festival
Child of the revolution: the Burmese family that democracy brought back together

Home of the free

The Burmese family that democracy brought back together
Cannes review: Canine accolade and Hitler's return are high spots amid the gloom

Cannes review

Frocks, canine accolade and Hitler's return
Robert Fisk: The going price of getting away with murder... would $33m be enough?

The going price of getting away with murder

Robert Fisk: The long view
Principled Skinner rises above the fray

Principled Skinner rises above the fray

Andy McSmith meets Dennis Skinner
Patrick Cockburn: I fear this terrible massacre will be the beginning of a long civil war in Syria

Patrick Cockburn

I fear this terrible massacre will be the beginning of a long civil war in Syria
Hardeep Singh Kohli: For me, it is all about 'Gregory's Girl', a record of first love

Hardeep Singh Kohli

For me, it is all about 'Gregory's Girl', a record of first love
Christian Louboutin: 'I don't think comfort equals happiness'

Christian Louboutin interview

'I don't think comfort equals happiness'
Happy birthday, Hotel Babylon!

Happy birthday, Hotel Babylon!

Hollywood's home to the A-list celebrates 100 years of discreet luxury
Rupert Cornwell: Low-rise capital could finally reach for the sky

Rupert Cornwell: Out of America

Low-rise capital could finally reach for the sky
The secret life of the red carpet

The secret life of the red carpet

As Cannes reaches its climax with the Palme d'Or and the celebrities gather in London for the Baftas tonight, Kate Youde and Jack Dean investigate the real star of the show
It's not easy being Professor Green: The rapper, the heiress and a drama made in Chelsea...

It's not easy being Professor Green

The rapper, the heiress and a drama made in Chelsea...
Hardcore, hard-wired: How the prevalence of porn is changing our everyday lives

How porn is changing our lives

It's everywhere - from pop videos to fashion magazines to the theatrical stage.
River Phoenix: the final reel

River Phoenix: the final reel

Twenty years after the actor's death, his last film is to be released
Facebook: The shares shenanigans

Facebook: The shares shenanigans

Investors are crying foul over the huge losses they incurred when the social network site floated on the stock market last week