Backgrounder: U.S. Financial Crisis
LONDON, Oct. 9 (Xinhua) -- As about 300,000 British savers are watching closely at the future of their money in the trouble-ridden Iceland, hundreds of millions of pounds invested by British councils are facing equal risk, it is learned on Thursday.
One authority alone, Kent County Council, is said to have 50 million pounds (about 87 million U.S. dollars) deposited in troubled Landsbanki and its UK subsidiary Heritable, as well as Glitnir Bank.
More than 20 others might also have the similar fates with their millions of pounds.
Transport for London, said it has 40 million pounds (about 70 million dollars) deposit with Kaupthing Singer & Friedlander, which has been placed into administration.
The Financial Supervisory Authority explained that domestic deposits at the bank were fully guaranteed in line with a declaration by the North Atlantic island nation's government.
London public authorities are thought to face exposure of around 200 million pounds (about 350 million dollars), according the umbrella organization London Councils.
A spokesman said he was aware at present of eight London borough councils with investments in Icelandic banks which may be at risk.
While nobody could have anticipated the collapse of what were once safe deposits, the government must now act swiftly to safeguard these assets and protect London's council taxpayers, according to Sky News.
Chancellor Alistair Darling promised he will make sure all British savers with accounts in the collapsed Icelandic internet bank Icesave get all their money back, saying no UK saver would lose money as a result of the closure of Icesave.
Icesave has stopped customers withdrawing savings.
The Chancellor said he was doing this because the Icelandic authorities had reneged on their obligations to ensure compensation could be paid, but the Chancellor's words is believedto be noncommittal.
