Borough relief over Iceland investments

BOROUGH finance chiefs are celebrating today after hearing they should get back almost all of the money they invested in failed Icelandic banks.

BOROUGH finance chiefs are celebrating today after hearing they should get back almost all of the money they invested in failed Icelandic banks.

Ipswich Borough Council had feared it would lose most of the �5million it had invested in Icelandic banks, Landesbanki and Heritable.

However, they have been told that the council should get back �4.6million - although it will be paid in instalments and the last payment will not be made until 2012.

Borough deputy leader John Carnall was delighted at the news about the accounts - and said it should ensure there would be no extra charges for council taxpayers.


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He said: “We had �4 million in Landesbanki and �1 million in Heritable. We have now been told that we will get 96 per cent of our money back from Landesbanki and 80pc of our money from Heritable.

“That means our total losses should be only about �400,000. That is not good, but it is a lot better than we had feared at one stage.

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“The council should be able to cope with that out of its reserves and there should be no impact on council taxpayers.”

Mr Carnall said the money had been used as an investment to provide the council with extra income - and to act as a reserve for use in an emergency.

But the experience with the Icelandic banks had forced it to re-assess its investment policy.

“From now on we are only investing in British institutions,” he said. “Although when you look at the events of the last year you can't even be over-confident about that.

“What has changed too is that our main criteria for investment now is the security and ease of access of the money rather than necessarily trying to get the highest possible return for it.”

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