Bust banks cost town hall dear

LANCASTER City Council’s failed investments in Iceland’s stricken banking system cost the taxpayer £438,000.

The figure was revealed as Iceland’s Supreme Court ruled the authority will be paid back 93 per cent of the £6m it deposited in Landsbanki and Glitnir banks in 2007. The money was feared lost when the banks collapsed in 2008.

The judgment means around £5.6m will be recovered, with an interest return of around £380,000. However, if the investments had matured in 2009 as planned the authority would have made £418,000 in interest.

Coun Eileen Blamire, leader of Lancaster City Council, said: “This judgement will mean that Lancaster City Council’s claims will be recognised as having priority over other creditors’ claims. This means we will be paid first when it comes to getting our money back and we should recover most of the money we had on deposit with the failed Icelandic banks.”

See the Lancaster Guardian (10-11-11) for full story.