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.
Waht about the Dutch clients?
Very interesting to read the comment about UK savers not needing to be nervous. The Icelandic finance minister assured us in a radio interview on Saturday that Iceland would honour its obligations under its compensation scheme should the UK Icesave go bust. Today, our Finance Minister revealed that he has been told by the Iceand government that they intend to renege on their promise. The upshot is that the UK government will provide compensation and sue the Icelandic government. Who in the UK will ever trust Iceland again?