Oxford University has £30m stuck in Iceland

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http://www.thisislondon.co.uk/standard/article-23573748-details/Oxford+University+has+%C2%A330m+stuck+in+Iceland+headline/article.do

Oxford University has £30m stuck in Iceland



Nicholas Cecil, Chief Political Correspondent
16.10.08

Costly error: Oxford University has £30m tied up in Icelandic banks



THE full scale of the Iceland bank crash's impact on British institutions was emerging today.

Oxford University revealed it had £30million deposited with three stricken Icelandic banks, Landsbanki, Glitnir and Kaupthing Singer and Friedlander.

The sum is far bigger than other universities' exposure.

Embarrassingly for the local authority spending watchdog, the Audit Commission, it was also reported to have millions of pounds frozen in Reykjavik banks.

The Financial Times suggested the figure could be as high as £10million.

The revelation comes after emergency teams were sent into three local councils facing financial difficulties because they have cash blocked in collapsed Icelandic banks.

Uttlesford district council said it would receive help from one of the financial teams.

The council, which has its headquarters in Essex and covers Saffron Walden, Dunmow, Thaxted and Stansted, has £2.2million deposited with Landsbanki in a one-year deposit which expired yesterday.

"Our annual budget is £10.2million and our current forecast shortfall on the 2008/09 budget is £200,000," said a spokesman.

"We are not able to spend the money deposited with this bank because Government rules prevent us from doing so."

Plymouth City Council, which has £13million tied up in three Icelandic banks, has revealed it is to borrow an extra £9million to make up for a budget shortfall this month.

An emergency team also went into Wyre Forest District Council in Worcestershire.

The town halls are among 13 which have said they may face short-term problems although ministers insisted there was "no reason to think that wages will not be paid or that services could be at risk".

The Local Government Association has identified 116 local authorities with £858million invested in the banks.

Around a third of this sum could be recovered from the assets of Icelandic banks frozen in the UK.

Administrators Ernst & Young, however, said it would be mid-November before it could estimate accurately how much could be recovered from the British operations of the Kaupthing and Heritable banks.

20 INSTITUTIONS WITH FUNDS AT RISK

Transport For London: £40 million

Metropolitan Police: £30 million

Kent county council: £50 million

Haringey council: £37 million

Barnet council: £27 million

Newham council: £7 million

Surrey county council: £20 million

Hillingdon council: £20 million

Westminster council: £17 million

Brent council: £15 million

Sutton council: £5.5 million

Bromley council: £5 million

Sussex Police Authority: £6.8 million

Hammersmith Hospitals NHS Charities: £1.65 million

Christie Hospital NHS Foundation Trust: £7.5 million

Central/North West London NHS Foundation Trust: £1 million

Oxford University: £30 million

Cambridge University: £11 million

National Cat Protection League: £11.2 million

The Samaritans: £1.5 million

 

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It is starting to look increasingly like the British Government engineered the collapse of the Icelandic banking system. With British town councils, charities, hospitals, universities etc all unable to access the millions of pounds from the Icelandic banks it seems certain that extremely hard times will filter down to the people. How can hospitals operate with no money, how can charities feed the homeless and help the millions of children already suffering in poverty?

Comments from Sigurdur Einarsson, the Icelandic Kaupthing bank's chairman.


"Sigurdur Einarsson, the bank's chairman, said the seizure of the UK arm directly led to the collapse of the entire group. "It is very sad, unfortunate and disappointing," he said.

Mr Einarsson said that Kaupthing wanted to take part in the UK government's rescue plan, but was rebuffed – the catalyst for its collapse just hours later.

"We are not Barclays, HBOS or Lloyds TSB, but I believe we are the twelfth largest bank in the UK and we were not allowed to participate in the rescue plan. We asked and the answer we got was a firm no," he said.


Britain's involvement in the failure of Kaupthing descended into a diplomatic row after the Icelandic Prime Minister expressed his displeasure at the "not very friendly" attitude shown by UK authorities.

The Treasury made use of anti-terrorist laws to seize Kaupthing, Singer & Friedlander to ensure the stability of the UK financial system and to protect the interests of depositors and taxpayers.

http://www.telegraph.co.uk/finance/businesslatestnews/3167732/Financial-Crisis-Kaupthing-blames-collapse-on-British-Government.html