Icelandic Banks & Your MoneyPosted on: 15 October 2008 by Gareth Hargreaves
What to do if you had savings with Landsbanki, Heritable, or Kaupthing Singer and Friedlander.
The Chancellor has put in place arrangements to ensure that all retail depositors in the Icelandic banks of Landsbanki (including their "Icesave" products), Kaupthing Singer and Friedlander (including their "Edge" products), and Heritable will receive their money in full.
Retail Depositors - Including Individuals
Most Heritable and all Kaupthing Edge savers will find that their accounts are safe, but now come under the umbrella of ING.
ING is a Dutch owned international banking and insurance group, with branches in London and elsewhere. The group has over 85 million customers worldwide, and is one of the 20 largest financial institutions in the world. ING Direct already has over 1 million customers in the UK using its online banking services.
For Heritable, deposits in Heritable's retail deposit products have been transferred to ING Direct. These products include the 2, 3, 4 and 5 year fixed rate bonds, easy access, online saver, direct saver, 50 plus saver, and the 60, 90 and 120 day notice accounts. You can continue to access your account in the same way as you did previously at www.heritable.co.uk.
For Kaupthing, all retail deposits under the "Edge" brand have been transferred to ING Direct. You can continue to access your account in the same way as you did previously at www.kaupthingedge.co.uk.
Further Information For Heritable & Kaupthing Edge Customers Now With ING
Visit the ING website for details at www.ingdirect.co.uk/general/faqs/keandhb.asp.
Heritable & Kaupthing Accounts Not Transferring To ING
A small number of retail depositors have accounts with Kaupthing that are not part of the "Edge" brand or accounts with Heritable which have not been transferred to ING Direct. These depositors will receive their money in full, with the government covering deposits in excess of the £50,000 Financial Services Compensation Scheme (FSCS) limit.
They will need to apply to the FSCS to receive their deposit. Further detail can be found on the FSCS website www.fscs.org.uk/consumer or by phoning 0207 892 7300.
The FSCS are working with the administrator of KSF will endeavour to contact these individuals and make payments to them as soon as possible.
All non-Edge retail depositors will receive payments of the gross amounts of the balances on their accounts.
Retail deposits for these purposes means the credit balances on Kaupthing Edge Savings Accounts and Kaupthing fixed term deposit accounts held by people who are eligible to claim under the FSCS. This includes most private individuals and some small businesses and charities.
For further details, please see Chapter 4 of the FSA's Compensation Sourcebook or the Financial Services Compensation Scheme website www.fscs.org.uk.
All retail depositors in Icesave will receive their money in full. We are working urgently with the Icelandic Authorities to clarify the position of Icesave and the Financial Services Compensation Scheme are putting in place practical arrangements to allow depositors to receive their money as quickly as possible.
Arrangements are being put in place to ensure that all ISA customers of Icesave will continue to benefit from the tax-free status of their accounts.
Financial Services Compensation Scheme
These arrangements supplement, but do not replace, the FSCS - which covers in full the first £50,000 of financial loss in respect of retail deposits.
The FSCS has financed its payout through a loan from the Bank of England. The Chancellor of the Exchequer restates that the Government stands behind the FSCS, so that it can be relied upon to be able to play its role in meeting future claims that arise.
Wholesale Depositors - Including Local Authorities
Landsbanki is in receivership in Iceland. The Government is urgently trying to establish what this means for UK wholesale creditors, including local authorities.
Kent County Council has £50 million deposited in Icelandic banks, Dorset £28.1 million, and other British councils also have millions deposited in Icelandic accounts.
The Government also took action by freezing the UK assets of Landsbanki, to help ensure that UK wholesale creditors of Landsbanki are treated fairly.
Heritable, the UK subsidiary of Landsbanki is in administration in the UK.
Any creditor should contact Heritable on 020 7493 6621.
The same situation applies for Kaupthing Singer & Friedlander, the UK subsidiary of Kaupthing also in administration in the UK and creditors should contact the call centre there on 08451 31 32 33 or 08451 31 32 34.
For Glitner Bank, the parent company is in "receivership" in Iceland.
The Treasury are urgently trying to establish with the Icelandic Goverment what this means for creditors.
The Treasury made an order to freeze funds owned, held or controlled by Landsbanki. This was due to concerns about the detrimental effect on the UK economy of the current situation.
In order to ensure that the asset freeze on Landsbanki does not adversely affect third parties, the Treasury has issued a licence exempting certain activities from the terms of the Landsbanki Order. The licence allows funds to flow into Landsbanki's frozen accounts in the UK and businesses will be able to access their accounts and other facilities with Landsbanki London Branch. The Treasury is monitoring the situation and will issue further licences if necessary.
The Treasury has also issued a notice confirming that the Order does not freeze the assets of subsidiaries of Landsbanki Island hf.
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