What will happen to charity cash invested in Icelandic banks?

Following the collapse of Icelandic banks a number of charities that had money invested in these banks because of the high rates of interest being offered have come forward with concerns that they may have lost millions of pounds. The UK government has given a 100% guarantee on UK consumer savings in these banks after the Icelandic government failed to do so, but there was no indication given with regards to whether this guarantee would be given to charities and authorities with money in the banks.

Officials from the National Council for Voluntary Organisations have said that around sixty of its members have come forward so far to say that they may have lost significant sums of money following the collapse. The NCVO has met up with government ministers in order to talk about the situation and see what can be done. Ministers have promised that they will do all that they can to protect the money of the charities, estimated at around £1 billion.

Speaking about what the City Minister, Paul Myners, has said at the discussions, the Chief Executive of the NCVO said: “He was saying the government would do all it can to ensure the assets of these charities are reunited with them. He was very positive about that. What’s important is the charities which have been affected by this come forward. If we’re going to secure adequate compensation for them, with the strength of the UK government, it’s important they come forward.”

The Physiological Society had over half a million pounds in one of these banks, and other charities had much more, such as the Cat’s Protection League, which had over £11 million invested.

An official from the Physiological Society said: “This is a difficult time for our organisation. We have £523k tied up in KSF and are not entirely sure if we will get this money back. With NCVO we are calling on the government to help protect our money as well as other organisations who may also be involved in the banking crisis.”