Iceland agrees to compensate UK
June 19, 2009 by admin
Filed under News, News-Banking
It has been revealed that the Icelandic government has finally agreed to repay the UK as well as the Dutch authorities following the collapse of the Icelandic banking system.
The UK government had to shell out over £2 billion to compensate savers who had money in Icesave accounts after the Icelandic banking system dramatically collapsed, which then resulted in the nationalisation of the banking system in Iceland.
Following the collapse of Icesave the retail accounts of around 300,000 depositors were affected. The refusal of the Icelandic government to compensate savers at the time of the collapse caused high tensions between the UK and Icelandic government.
The UK Treasury then had to find over £2 billion to compensate UK savers that had lost their money as a result of the collapse. However, the Icelandic government has now stated that it will repay the £2.3 billion paid out by the UK government as well as interest.
One official from the government stated: “This is good news for UK taxpayers and good news for Iceland. The government welcomes Iceland’s commitment to recognise its obligations under the EC Deposit Guarantee Scheme to repay depositors in Icesave.”
The government has said that the move by the Icelandic authorities will help to build bridges between the two governments, and is a very positive step towards a brighter future.
However, on the downside the agreement that was put forward recently only deals with the reimbursement of funds for retail customers. Many British local authorities and other bodies were also affected by the collapse of the Icelandic banking system, but this agreement does not cover them, which means that they will have to wait and see whether there is any good news with regards to their money.
