Britain takes on Iceland for bailout cash
BRITAIN’S bank deposit rescue fund is taking an Icelandic fund to court in a bid to recover the cost of saving British depositors in failed lenders from the country.
In 2008 Icesave went bust, leaving UK investors in the lurch. The UK bailed them out using the Financial Services Compensation Scheme (FSCS).
Although the UK lost a court case trying to recover the funds immediately from the Icelandic government, it is making another bid for the money.
Icelandic Depositors’ and Investors’ Guarantee Fund yesterday said the FSCS is demanding 452bn Icelandic Krona (£2.4bn) and the Dutch central bank says it is owed 106bn Krona.
Once interest and other charges are added, Iceland fears the total claim could be 1,000bn Krona.
The Atlantic island’s economy has rebounded since the financial crisis but still faces challenges. Some capital controls remain in place, while GDP is well below its pre-crash peak.
This claim from Britain and the Netherlands comes in at more than half the country’s GDP.