UK councils hit by Icelandic banks

Local authorities have not been "reckless" in investing more than £760m with failed Icelandic banks, the government has said.

Deposits from about 100 councils could be at risk, the BBC has learned.

Ministers have met council leaders and are promising "appropriate" help on a "case-by-case basis".

Gordon Brown said he was considering "further action", but the government is not offering to guarantee authorities' deposits with Icelandic banks.

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Banks have become so big and so leveraged that their balance sheets can exceed the gross domestic product of the country in which they are based. That's the case in Belgium, the Netherlands and a host of smaller countries, including Iceland

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The Stunning Collapse of Iceland
The government has seized the top banks and halted trading on the Reykjavik stock exchange. Even so, Iceland may face national bankruptcy

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ELP FROM RUSSIA?
To avert financial disaster, the country—which is a founding member of NATO—may turn to Russia for help. The Russian government has said it would consider lending Iceland $5.5 billion. "We have not received the kind of support that we were requesting from our friends," Haarde said. "So in a situation like that one has to look for new friends." (Haarde was adamant, though, that any deal did not extend to military cooperation, refuting the suggestion that Russia might be given access to an airbase vacated by the U.S. Air Force in 2006.)

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antowan said:

Seems like this crisis could leave a changed global political setup in its wake...

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Slootvreter said:

I would still like to live and work in Iceland though. Or Scandinavia.

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