Significant progress has been made over frozen UK investments in failed Icelandic banks, say the Treasury and the Icelandic authorities.

Arrangements have been agreed "in principle" for a quick payout to depositers in Landsbanki's closed internet bank Icesave, they said.

The delegations agreed to work closely on the other remaining issues over the coming days, the statement said.

The delegations met "in a friendly atmosphere in Reykjavík", it added.

British investors have roughly £4bn in the Icelandic Iceland thumped by credit crisis ...
£1m banknote sold at auction for £78,000 ... bank.

Although Chancellor Alistair Darling had promised to compensate investors in full, the first £16,000 of a deposit is meant to be guaranteed by the Icelandic authorities.

It is understood Iceland has now agreed in principle to honour this commitment.

A Treasury delegation is in the Icelandic capital to seek assurances UK savers with money in collapsed Icelandic banks will not lose their deposits.

The group wants to establish a claims procedure for British depositors to get their money back as soon as possible.

Under Iceland's financial regulations, its government is supposed to pay up to £16,000 compensation per account at a total cost of £2.2bn.

The UK government is also pressing for the quick return of almost £1bn of funds invested by councils and other public bodies, including charities.

The Treasury delegation in Reykjavik includes officials from the Bank of England and the Financial Services Authority.

(BBC)

<< Back