In and Interview with the BBC on Saturday, Tryggvi Herbertsson, economic adviser to the Icelandic Prime Minister said the government could and would step in if needed. “Savers in the UK who have put their money into Icelandic banks have been told their deposits are safe,” he said.
But despite such reassurances Icesave (Landsbanki) confirmed that customers had been reducing their accounts to be below the limit protected by the financial services compensation scheme. The limit will be GBP 50,000 – up from 35,000 next Tuesday.
Tryggvi Herbertsson said, despite its economic problems, the Icelandic government would honour that commitment if a bank did get into trouble.