Soooooo how much does your Council have in Iceland?

[BooScout]

Ours (Caerphilly) has £15,000,000. What I want to know is why are British Councils putting money in Iceland banks?

[muriel_volestrangler]

1. Say the inerest rate from them was 0.5% higher than a British bank

that would be £75,000 a year, for £15 million. That's why.

[BooScout]

2. Hmmmmm

Now what's 0.5 % of 0?

[muriel_volestrangler]

3. I guess it depends on how dodgy people thought Iceland was

I heard a council official saying the banks concerned had a good credit rating up until about a week ago. Whether that's strictly true, I don't know.

[Mr Creosote]

8. In the bad old days when I was an IFA

I formed the opinion that the credit rating given to companies was directly proportional to the mount they paid to get that credit rating.

[T_i_B]

11. Speaking of credit ratings...

One thing that I expect to see happening is less generous credit terms being offered by companies. Less 60 day credit terms and more companies insisting on cleared funds only for instance.

[Mr Creosote]

12. Say the interest rate from them was 0.5% higher than a British bank

that would be because it's riskier.

[WritersBlock]

4. I dunno, but we moved our ISAs there this summer.

We followed the advice of a famous expert on saving money. Shoulda known better, but there ya go. I don't expect to see the money again.

[T_i_B]

5. Apparently my Council has a few bob in Landsbanki

Not as bad as Caerphilly but not good either way

http://www.gazette-news.co.uk/news/3743182.Colchester____4m_gets_frozen/

[LeftishBrit]

6. Oxford City Council 4,500,000

Oxfordshire County Council 5,000,000

I just hope my employer (university) hasn't got too much with them!

[T_i_B]

7. Are there any organizations left who haven't been wacked by the credit crunch?

It says something when even public bodies like the Metropolitan Police are getting credit crunched.

And now Charities are caught up in this mess

http://news.bbc.co.uk/2/hi/uk_news/7663136.stm

[non sociopath skin]

9. A lot.

http://news.bbc.co.uk/1/hi/england/tyne/7664087.stm

The Skin

[fedsron2us]

10. Adur District Council had nothing in the Icelandic Banks

West Sussex County Council was said to have upto £12 Million exposure in the press but part was in one of the UK subsidiaries which has been flogged off to ING so not all may be lost.

I actually have a lot of sympathy with the Councils, After the BCCI fiasco they were compelled to spread their money all over the banking market and Prescott insisted that they got the best possible return on their deposits. If they just bunged in National Savings or Gilts they wound up being slagged off by the Audit commission. The set up virtually ensured they would take a hit at some time during the crisis.

The real villains of the piece, apart from the banks, were the FSA, who regulated these institutions and were yet gain found asleep at the wheel.

I expect most Councils will be able to cover these losses out of their contingency budgets as they are normally required to keep substantial reserves for just such a crisis.

The people who may have been hit worse are the charities. Some of them have got seriously burnt in this fiasco and may not be able to recover.