Savers who lost money in Iceland are snubbed.

An influent group of MPs recommended that the consumers should not be helped, in order to compensate for losses the charities incurred due to the collapse Iceland’s banking sector. The Commons Treasury Select Committee thinks that these problems need to get solved as soon as possible, but the taxpayers shouldn’t have to pay more in order to straighten things out for the citizens and local authorities, who incurred when Isle of Man and Guernsey subsidiaries of the Icelandic banks went under.




(John McFall)

“It’s practically impossible to fully recompensing savers. It would mean a enormous change to our lives.”, said a spokesman. A very high percentage of depositors in Landsbanki Guernsey were British citizens, of which the majority pensioners are facing a huge loss of their own life savings. Chancellor Alistair Darling pledged that UK savers in failed Icelandic banks would get their money back. Some savers have already received cheques. John McFall, chairman of the Treasury committee, said the inquiry had received over hundreds of letters from people who had lost their savings, as evidence.


The consequences of the Icelandic banks’ failure are clearly serious and distressing for all concerned. Anyhow, UK taxpayers cannot be expected to cover deposits held in institutions outside the UK’s direct regulatory control. He urged the government to work together with the Isle of Man and Guernsey authorities to resolve these issues. The committee also plans to look at rules that allow overseas banks operating in the UK to “passport” into the UK compensation system.

I think that in this case it’s first class priority to find a solution to this issue. They need to come up with more money to repay the consumers who invested their savings in the Icelandic banks. Their needs to be held a meeting in which a UK representative and an Icelandic bank agent should discuss who’s going to pay for this.


A fine solution could be that both UK and Icelandic governments make this work. I don’t think that UK taxpayers should be expected to cover deposits held in any institution outside the UK, especially at a time were more people than ever are faced with economical difficulties. I also don’t think that editing rules that allow overseas banks to operate in the UK are going to solve these problems.

Source: http://www.timesonline.co.uk/tol/money/investment/article6035107.ece

Written by Tom Baeyens,
Student at Artevelde College
2FI2