Languages
Page last updated at 14:03 GMT, Tuesday, 27 January 2009

Collapse 'could delay bank talks'

KSF (Isle of Man) building
The scheme will cost the government about 11m

The collapse of Iceland's government could delay talks to resolve the Kaupthing Singer and Friedlander (KSF) crisis, the treasury minister has said.

Depositors were unable to access their funds when the Isle of Man bank's licence was suspended in October 2008.

UK treasury officials have represented the island in talks with Iceland, which nationalised KSF parent bank Kaupthing, to retrieve savers' money.

Allan Bell said the collapse of its government would slow down proceedings.

On Wednesday Iceland's Conservative Prime Minister Geir Haarde announced the resignation of his cabinet, after talks with his Social Democratic coalition partners failed.

Fresh hearing

Mr Bell said: "Our link with Iceland has been through the Resolution Committee, which was set up to manage the affairs of the old Kaupthing Bank.

"Nevertheless, the resignation at this point of the entire Icelandic government I'm sure will have some impact on the negotiations which are taking place between the UK Treasury and the Icelandic authorities.

"But that might only be to perhaps slow down some of the proceedings, rather than actually arrive at a different solution."

The Isle of Man government has blamed the bank's demise on the UK government, which froze Icelandic bank assets during its economic troubles.

More than 870m was deposited by customers in KSF Isle of Man when it went into provisional liquidation on 8 October, according to documents lodged with the High Court.

A winding-up petition for the bank was adjourned twice while government officials sought an alternative to liquidation. A third hearing is scheduled for 29 January.

If the bank is wound up savers, many of whom have hundreds of thousands of pounds trapped in the bank, would only be able to claim up to 50,000 compensation.

Depositors can apply for a 1,000 interim payment from the government.



Print Sponsor


SEE ALSO
Crisis claims Icelandic cabinet
26 Jan 09 |  Europe
Kaupthing payment scheme approved
20 Jan 09 |  Isle of Man
Date is set for Kaupthing payout
26 Dec 08 |  Isle of Man
Account payments show 'goodwill'
18 Dec 08 |  Isle of Man
Bell seeks KSF payouts approval
15 Dec 08 |  Isle of Man
Treasury gets KSF petition delay
27 Nov 08 |  Isle of Man

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific