Savers Get Assurances Over Icelandic Banks

By Peter Wakeford
Published on 6 Oct 2008
AddThis Social Bookmark Button
Savers Get Assurances Over Icelandic Banks

Concerns are growing over the financial stability of the providers of the Kaupthing Edge and Icesave accounts.

Icelandic banks have attempted to reassure their UK customers that their savings deposits are not under threat.

Both Kaupthing and Landsbanki - the Scandinavian country's two largest financial firms - operate popular high-interest accounts through their British businesses, Kaupthing Edge and Icesave. However, the recent worsening of the credit crunch has hit Iceland's economy hard.

The government has been forced to rescue the third largest bank, Glitnir, from collapse. Iceland's economy is also very dependent on its financial services sector - and has therefore been more affected by the recent general downturn in investor confidence which has knocked banks' share prices and capital-raising abilities.

Indeed, both Kaupthing and Landsbanki are many times the size of Iceland's economy - leading to analysts' fears that the government cannot save them from going out of business through nationalisation.

Further complicating the situation is the fact that the two banks are under different deposit guarantee schemes, which insure customers against their bank's collapse. Kaupthing Edge is covered by the UK's guarantees, which covers the first £50,000 in a savings account from tomorrow - while Icesave customers would have to claim their first £15,000 from the Icelandic compensation scheme and the rest from the UK if Landsbanki collapsed.

Speaking to the BBC Mark Sismey-Durrant, chief executive of Icesave in the UK, said: "We have a strong capital base and 63 percent of our balance sheet is funded by deposits. We maintain strong liquidity levels."

He added that savers' money remained safe with the bank.

Tryggvi Herbertsson, economic adviser to the Icelandic prime minister, also aimed to reassure nervous savers. "The banking system in Iceland is very large compared to the economy, but still we think we can maintain the problem because the balance sheet of the bank is very good," he said.

Compare savings accounts via money.co.uk

Money Saving Newsletter

Already registered? Login Here

Email:

We will NOT pass your details on to any third party.

See some of the recent tips you could have benefited from.

Your privacy:

Read our privacy policy.
We are registered with the Data Protection Act (1998): No. Z6245956
details
We are regulated by the Financial Services Authority: No. 415689
details



Add Your Comment

Name: 
Comment: 
You have 1000 characters left.

Comments (4)

Any opinions expressed below are solely those held by individual users and are not in any way endorsed by, or representative of those held by Money.co.uk. We accept no responsibility or liability for the accuracy or content of any material submitted and maintain the right to publish, remove or edit it as we see fit.
susan jones
6th Oct 2008 13:15
I feel extremely unsafe I have £35,000 in a fixed rate bond at 7.15% with Kaupthing Edge. Please can you tell me if this is completely covered by the FSCS or is it a 2 part passport scheme. If it changed to a passport scheme would I still get my moey back. I do not wish to pull my money out as it just starts a domino effect but need to know if it is safe. Mrs. Susan Jones
paul james
6th Oct 2008 15:34
I don't understand why savers are still nervous.

the regulators and other parties have commented that kaupthing edge is safe.
Mr P A Lovatt
7th Oct 2008 17:44
Could the IMF help you out? as the balance sheet is good
Steven L
7th Oct 2008 20:43
So within a few days of these reassurances, Landsbanki and Icesave has collapsed... doesn't this make a bit of a mockery of the comments that come from banks saying your money is safe, when clearly it was not. It doesn't exactly inspire trust

Latest Savings Accounts Articles & News

Savings Accounts Articles

A&L Points Out Savings Trend
Alliance & Leicester Highlight Savings Trend

People are becoming more conservative in their spending than before, analysis from the bank has shown.

Savings Providers 'Planning Rate Cuts'
Savings Providers 'Planning Rate Cuts'

The Bank of England's recent interest rate reductions are being reflected by savings account providers.

PPF Help is Needed, Pensions Group Suggests
PPF Help is Needed, Pensions Group Suggests

A pension group has called for the government to give the pension protection fund support, in the manner of recent bank bailouts.

Treasury Updates on OMO Review
Treasury Updates on OMO Review

Retirement savings providers still need to work to promote the OMO, the government has said.

FSA Unveils New Savings Rule
FSA Unveils New Savings Rule

Some building society savers will benefit from the temporary measure.

Pensions Act Receives Royal Assent
Pensions Act Receives Royal Assent

The new legislation makes Personal Accounts a reality under UK law.

Many 'Unsure' About Personal Accounts
Many 'Unsure' About Personal Accounts

A big new retirement savings scheme from the government is causing confusion in UK workplaces, a poll shows.

Over 50s 'Still Saving for Retirement'
Over 50s 'Still Saving for Retirement'

New research has indicated that most people over 50 are still putting away money for their retirement.

Popular Related Articles

Savings Providers 'Planning Rate Cuts'
Savings Providers 'Planning Rate Cuts'The Bank of England's recent interest rate reductions are being reflected by savings account providers.

Latest Related Headlines

Volatile Market Conditions 'Will Continue'
Volatile Market Conditions 'Will Continue'Big daily rises and falls on exchanges are expected to continue until next June.

Other Money Headlines

Pension Act 'Impacts on Income Protection'
Pension Act 'Impacts on Income Protection'An insurance provider has warned that the new Pensions Act may impact income protection policies.
RSS FeedSavings Accounts News
RSS FeedLatest Headlines
Free Services Money Saving Newsletter
The best money saving deals, freebies, rate alerts and advice emailed to you every week.
Enter your email:
Find Companies Savings Guide RSS Feeds - Subscribe!
The "advice" given in our money saving tips is for information purposes only and should not be construed as "financial advice".
money.co.uk recommends you seek professional advice before proceeding with any investment or financial decision.
Site Map | Privacy Policy | About Us | Contact Us
money.co.uk is a trading name of Dot Zinc Limited, who are authorised and regulated by the Financial Services Authority. FSA Registration Number: 415689.
Copyright © www.money.co.uk / Dot Zinc Limited 2002-2008. All rights reserved.
Home | Login | Sign Up