February 10, 2014 / 8:42 PM / 4 years ago

UPDATE 1-UK, Dutch file $4.8 bln Icesave debt claim against Iceland fund

(Adds finance minister, fund comment, background, detail)

REYKJAVIK, Feb 10 (Reuters) - Britain and the Netherlands have filed a claim of 556 billion Icelandic crowns ($4.85 billion) plus interest and costs against Iceland’s deposit insurance fund over money their savers lost in Icesave funds, the island’s Depositors’ and Investors’ Guarantee Fund said on Monday.

The claim relates to money lost by British and Dutch savers who held Icesave accounts run by the Icelandic bank Landsbanki, which collapsed in late 2008.

The savers were compensated by the British and Dutch governments and Iceland says it has paid back around 90 percent of the amount the two paid out to cover a minimum deposit guarantee. The island’s voters have twice rejected deals that would pay interest on the debt.

“Basically these claims are about the interest and the costs,” Gudrun Thorleifsdottir, the head of the Icelandic Depositors’ and Investors’ Guarantee Fund’s (TIF) said.

Thorleifsdottir said the TIF rejected the claims, adding that including interest, cost and the principal, they could total 1,000 billion crowns.

The fund has assets of around 35 billion crowns, she said.

Iceland’s gross domestic product was 1,700 billion crowns in 2012.

“There is no state guarantee so it is clear that Icelandic taxpayers will never have to pay this,” Iceland’s Finance Minister Bjarni Benediktsson said.

Neither Britain’s Financial Services Compensation Scheme nor the Dutch central bank could immediately be reached for comment.

Iceland’s four main banks collapsed in late 2008, the economy and crown currency nose-dived and the government had to take a bailout from the International Monetary Fund and Nordic countries.

The country of just 320,000 people reimbursed domestic depositors who lost money in the crash, but not depositors from other countries who had money with Icelandic banks.

Britain and the Netherlands covered their savers, but argued Iceland should be liable for guaranteeing savings up to about 20,000 euros ($27,300) per depositor, plus interest and costs.

Last year, the European Free Trade Association said Iceland should be allowed to pay on its terms, agreeing with voters who twice rejected deals to pay interest to Britain and the Netherlands.

The Icelandic Foreign Ministry said at the time that 585 billion Icelandic crowns of the 1,166 billion crowns of claims from Icesave had been repaid from the failed Landsbanki estate.

Iceland said in January it expects to pay the claim in full.

TIF said the claim by Britain and the Netherlands was filed in November last year.

$1 = 114.5700 Icelandic crowns $1 = 0.7327 euros Reporting by Simon Johnson and Robert Robertson; Editing by Kevin Liffey and David Evans

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below