Friday, October 10, 2008

Two local authorities in the English county of Hampshire have a total of £3 million invested with troubled Icelandic banks it was revealed today. Rushmoor Borough Council has a £2 million investment with Glitnir, while Winchester City Council| revealed it has £1m invested with Landsbanki subsidiary Heritable.

Both district councils said the money accounts for only a small proportion of their total investments: 5% in the case of Rushmoor and 3% for Winchester. This is part of a nationwide problem, as over £550 million has been invested in Icelandic banks by British local authorities, with over 70 councils affected.

The news came after Icelandic Internet bank Icesave suspended all 300,000 of its UK customer accounts earlier this week as a result of the worsening global financial crisis. Personal customers of Icesave and other failed banks from Iceland have had the security of their savings guaranteed, but the same protection does not apply to the local government accounts. The Local Government Association (LGA) is campaigning for the protection to extend to them as well, and this call was backed by Winchester City Council.