Council affected by Icelandic bank crash

CHESHIRE County Council is one of the English local authorities affected by the crash of Icelandic banks and their UK subsidiaries.

The authority has £8.5 million invested with Heritable Bank, a UK subsidiary whose parent bank Landsbanki has been put into administration by the Icelandic government.

Out of a gross budget of £1 billion, and with £200 million invested with national and international financial institutions, the council’s Heritable Bank investment represents four per cent of the authority's total portfolio.

County council spokesman Ian Callister said: "While the money is apparently at risk because the bank has frozen all its assets, the situation remains highly complex and is changing daily.

"For instance, we understand that the UK Government has frozen the assets of Icelandic UK subsidiaries."

He stressed that the money was invested in accordance with Treasury Management Strategy to spread the risk by placing deposits with a large number of highly credit-rated institutions.

This, he said, was to get the best possible return for council taxpayers, and he added: "It was approved by council and managed in line with best practice principles and Government guidelines.”

The county council is liaising with the Local Government Association to persuade the Government to offer local authorities the same protection it has guaranteed to individual savers.

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