The much-talked-about EUR 500 million from the Central Bank of Iceland to Kaupthing shortly before the latter bank collapsed did not (for the most part) go to the UK and into Kaupthing Singer & Friedlander. This is one of the findings of the High Court case in London brought by Kaupthing against the British government. It is interesting to note, according to Visir.is, that the court ruling implies that if the loan had been used to support KS&F, the fall of Kaupthing might have been avoided. Read the full story

PRESS RELEASE FROM THE KAUPTHING BANK HF. RESOLUTION COMMITTEE:

The High Court of England has consented to Kaupthing Bank’s request for permission to apply for judicial review of the legitimacy of the decision taken by the UK authorities to transfer to a third party, without compensation, deposits from Kaupthing Edge accounts at the bank’s UK subsidiary, Kaupthing Singer & Friedlander, on 8 October 2008. Read the full story

Forbes.com yesterday published an article about the Icelandic economy which reignites the debate over the British government’s treatment of Icelandic banks in the wake of the collapse last October. Read the full story

James Daley, a columnist with The Independent in the UK wrote an article on Saturday asking who is to blame for the Icelandic banks’ collapse, Iceland’s vidskiptabladid reports.

Daley explains how he first felt proud with the British government’s actions to seize the assets of Icelandic banks in Read the full story

Icelandic cabinet ministers met this morning to discuss economic reforms to stabilise the Icelandic economy, MBL.is reports.

After the meeting, the Prime Minister, Geir H. Haarde, had little to say other than that the proceedings are at a very “serious” stage. The PM then went on to meet opposition leaders and then on to a meeting with pension fund managers at 11.00.

Last night, the Icelandic government sent out a statement on the security of Icelandic banks:

“The government of Iceland reiterates that deposits held by domestic commercial banks and savings banks and all their operations in Iceland will be insured in full.

By deposits, all deposits of general public and companies that the insurance of the deposit department of the State Insurance Institute covers are inferred.”

This means that the state treasury insures all private savings which fall under insurance fund definitions, and any savings over the amount automatically insured according to law will by directly insured by the treasury.

IceNews will offer further updates as they come.

A large number of savings account holders in the UK transferred their funds to Icelandic banks on Monday, reports Mbl.is

Icesave, a savings account offered by Landsbanki, and Kaupthing Edge, a similar high interest product offered by Kaupthing Singer Friedlander, saw a surge in business after UK customers lost faith in their own banks, according to Kaupthing.

“Savers in the UK became somewhat nervous of their banks and moved their money over to us,” said Gudni Adalsteinsson, managing director of Kaupthing’s Treasury Department.

The share prices of major British banks such as HBOS and Barclays plummeted in value on Monday, following the collapse of Lehman Brothers investment bank in the US.

Kaupthing said that Monday was in fact the fourth best day of business since it launched its Edge savings account in February this year.

The two Icelandic banks have completed this year’s refinancing of ISK 820 billion (USD 8.7 billion, EUR 6 billion) worth of loans and next year’s is well underway.