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Frosty relations between Iceland and UK

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by Kay Mitchell

Prime Minister Gordon Brown said yesterday that the UK may freeze the assets of Icelandic companies after he branded Iceland’s failure to guarantee British savings in its failed banks as ’unacceptable and illegal‘.

The two countries are battling over who should compensate British savers whose money is in Icelandic amid the collapse of the country’s banking system.

Iceland has had a disastrous week after the nationalisation of the country’s three largest banks. It has suspended trading on the OMX Nordic Exchange in a bid to prevent further crises. The stock exchange has been closed for trading for two days and is to reopen on Monday.

Meanwhile, last night, the Local Government Association (LGA) had gathered information reports showing that 108 councils in England, Scotland and Wales had deposited £798.95 million, while charities, including children’s hospices, warned they were at risk of losing £25 million.

Furthermore, several police forces also have investments in Iceland, as does Transport for London.

This led Gordon Brown to announce that he is freezing the assets of Icelandic companies in the UK where we can and that the responsibility for this lies fairly and squarely with the Icelandic authorities.

Brown added that the responsibility lies with the Icelandic authorities and he is demanding the money is paid back to the local authorities.

As a result, Treasury officials are heading to Iceland to discuss its banking crisis and the affect on UK individuals and councils with money in its banks.

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News posted: October 10, 2008

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