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Icelandic internet bank stops British customers making withdrawals after it admits: ‘We can’t safeguard your cash’

Posted By admin On October 7, 2008 @ 4:03 am In Featured Stories | Comments Disabled

UK Daily Mail [1]
Tuesday, Oct 7, 2008

More than 200,000 British investors in the Icelandic internet bank Icesave were today unable to make any deposits or withdrawals from their accounts.

Customers hoping to access their account were met with a message on the bank’s website this morning which said that Icesave was not ‘currently processing any deposits or withdrawal requests’.

There was no explanation for the move but it comes as Iceland’s government grappled with a major crisis in its banking sector.

The notice said: “We are not currently processing any deposits or any withdrawal requests through our Icesave internet accounts.

(Article continues below)

“We apologise for any inconvenience this may cause our customers. We hope to provide you with more information shortly.”

This morning Iceland’s Financial Supervisory Authority announced that it was stepping in and taking control of Landesbanki, the bank that owns Icesave.

“Based on new legislation, the Icelandic Financial Supervisory Authority (IFSA) proceeds to take control of Landsbanki to ensure continued commercial bank operations in Iceland,” the authority said in a statement.

But heads of Landsbanki last night admitted that Icesave’s UK-based savers would not get the same protection for their £4.5billion investments should it go bust.

Instead, from today their savings are protected to a maximum of £50,000 per head, the same as customers of UK banks.

Of this, they would have to claim the first £16,000 from the Icelandic government, with the UK compensation scheme topping up the rest.

Even so, there are concerns that the tiny Icelandic economy would never be able to refund billions.

Full article here [1]

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URL to article: http://www.prisonplanet.com/icelandic-internet-bank-stops-british-customers-making-withdrawals-after-it-admits-we-cant-safeguard-your-cash.html

URLs in this post:

[1] UK Daily Mail: http://www.dailymail.co.uk/money/article-1069715/Icelandic-internet-bank-stops-British-customers-making-withdrawals-admits-We-safeguard-cash.html

[2] Icelandic Taxpayers Win Key Case Against European Establishment: http://www.prisonplanet.com/icelandic-taxpayers-win-key-case-against-european-establishment.html

[3] Iceland Rejects Icesave Bank Payback Plan: http://www.prisonplanet.com/iceland-rejects-icesave-bank-payback-plan.html

[4] Update: Citigroup Says Feds Ordered 7 Day Restriction On Bank Withdrawals: http://www.prisonplanet.com/citigroup-warns-customers-it-may-refuse-to-allow-withdrawals.html

[5] Korean Bank Run Spreading: Eighth Bank Closes Following “Massive Withdrawals”: http://www.prisonplanet.com/korean-bank-run-spreading-eighth-bank-closes-following-massive-withdrawals.html

[6] Internet firms set to track and cash in on surfing habits of 11million customers: http://www.prisonplanet.com/internet-firms-set-to-track-and-cash-in-on-surfing-habits-of-11million-customers.html

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