Icesave customers get 100% guarantee

Amidst all of the financial chaos that has been taking place over recent days, the Chancellor of the Exchequer, Alistair Darling, has issued some good news to consumers that had money saved with the collapsed Icelandic Internet bank, Icesave. Darling has announced that savers with money with Icesave will receive a 100% guarantee on all of their savings, so those with more than the £50,000 threshold will not lose any of their money as a result of the collapse.

Darling said that Icelandic authorities were unable to meet their obligations to provide compensation to consumers, and this is why he had decided to take this action. However, government officials in Iceland have said that they are looking for a solution that is mutually satisfactory.

The accounts of Icesave’s three hundred thousand UK customers have been frozen. Many people opened accounts with the Internet bank after it stormed to the top of the best buy tables by offering impressive interest rates on savings accounts.

A Treasury official stated: “We guarantee that no depositor will lose any money as a result of the closure of Icesave.”

In his speech Darling stated: “The Icelandic government, believe it or not, have told me yesterday they have no intention of honouring their obligations here. Because this is a branch of a foreign bank the first call would be on the Icelandic compensation scheme which, as far as I can see, hasn’t got any money in it.”

Darling added: “The British scheme would top that up to £50,000, but people over and above that would lose out. But I have decided in these exceptional circumstances that we will stand behind those depositors so they get their money back.”

The Icelandic Prime Minister said, however, that his government would be looking for ways of helping out to raise funds for compensation. He said: “The government of Iceland is determined not to let the current financial crisis overshadow the long-standing friendship between Iceland and the UK.”