Treasury lends £100m to Landsbanki

by Gill Montia

Story link: Treasury lends £100m to Landsbanki

The Bank of England has agreed a short-term loan of £100 million to the UK businesses of Landsbanki, the Icelandic bank that has been placed in administration.

According to a Treasury spokesman, the move will help ensure an orderly wind-down of Landsbanki and maximise the return to UK creditors.

It will certainly assist UK savers with Icesave, Landsbanki’s Internet savings unit, who have been frozen out of their accounts since the bank’s collapse last week.

Icesave’s 300,000 UK depositors have already received an assurance from Chancellor of the Exchequer Alistair Darling that their money is 100% guaranteed even if their savings exceed the £50,000 per individual covered by the Financial Services Compensation Scheme.

Mr Darling has also confirmed today that work continues to settle the claims of UK charities and local authorities with deposits in Icelandic banks.

The Government has already seized the UK assets of Landsbanki and these could be used to help finance the loan.