Page last updated at 15:02 GMT, Tuesday, 14 October 2008 16:02 UK

Savings freeze for universities

Manchester Metropolitan University
The universities are looking at how they can recover their savings

Two universities in Manchester have confirmed they invested savings in the stricken Icelandic bank Landsbanki.

Manchester Metropolitan University (MMU) deposited 10m and the University of Manchester had 5m invested in its UK subsidiary, Heritable Bank.

It is believed they were one of at least 12 universities which became exposed to the Icelandic bank crash.

Both institutions are working with these other universities and the government to recover the funds.

"Investment risk"

A spokesman for MMU said: "We can confirm that MMU has funds to the value of 10m invested in the Heritable Bank which is a subsidiary of Landsbanki.

"Heritable Bank is currently in administration and the university's investment is frozen. MMU is working closely with the Higher Education Funding Council for England which is lobbying on behalf of all UK universities which have similar investments."

Diana Warwick, chief executive of Universities UK (UUK(, said: "Universities have broad investment portfolios and are experienced in spreading their investment risk.

"Nevertheless, as you would expect, there may be some institutions who are holding some investments with failed banks and certainly universities are now looking at the potential impact of this on their funds."

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