The position of savers is unclear
Cornwall County Council has £5m invested in failed Icelandic bank Landsbanki.
Iceland took control of Landsbanki on Tuesday, but the government has not guaranteed compensation for savers.
The UK Government has frozen British assets of Landsbanki until the position of savers in the UK becomes clear.
Finance managers at the council are waiting to find out whether the cash will be covered by guarantees issued by the UK Government.
Brian Higman, executive member for corporate support, said investing the funds it held across the financial markets was a prudent thing to do.
He said: "When we get money in, whether it's from council tax or grants, rather than leave it doing nothing, we try to make the most of it.
"That money is invested across a spread of many investments.
"If we had invested everything in Landsbanki, just imagine the position we would be in."