Cash from some Icelandic banks gone into the abyss

According to recent reports many of the UK savers that tried to transfer their money from the collapsed Icelandic banks, Icesave and Kaupthing Edge, have discovered that the money has not hit the accounts into which it was transferred. Many consumers who had put savings into the Icelandic banks due to the high rates of interest paid started to transfer their cash in the run up to the collapse following rumours that sparked fears over the collapse, but in some cases the money has been transferred out of the Icelandic account but not appeared in the recipient account.

The consumers affected used same day CHAPS transfers to try and transfer their cash, and the payment clearance service, APACS, has been receiving calls from worried consumers who have no idea where their cash has gone. Officials have said that the problems occurred because the Icelandic banks had locked withdrawals and frozen the assets of US customers in the banks.

One APACS official said: ‘Contrary to what these banks have been telling their customers, the CHAPS system has not ground to a halt. The plumbing bit in the middle, the transfer system, is working as normal - it’s the institutions that have closed the door to their vaults. That’s the problem. When a bank stops normal trading, no money is going to leave that institution.’

She added: ‘That’s not great news for anyone worrying over whether their money has disappeared but this has happened to a great number of people. But the money should eventually reappear.’

One consumer said that the only reason he was still calm was because the UK government had promised a 100% guarantee to UK savers that were victims of the collapse. He said: ‘If I hadn’t read about the Chancellor’s full guarantee on Icesave deposits this week then my blood pressure would be going through the roof. I’ve written to them to accuse them of stealing my money, which they have by ignoring a lawful bank instruction.’