Written question asked by Lord Laird (Ulster Unionist Party), in the House of Lords. It was answered by Lord Sassoon (Conservative) on Wednesday, 25 May 2011.
Banking: Iceland
- Question
- To ask Her Majesty’s Government, further to the Written Answer by Lord Sassoon on 26 April (WA 112), how much money deposited in Landsbanki was not reclaimed before the deadline of 30 October 2009 for repaying deposits of over £50,000; how many depositors were involved; whether HM Treasury will put in place a deadline for reclaiming all such deposits from failed Icelandic banks; and whetherthey will instruct the Financial Services Compensation Scheme to change its rules governing payouts for lesser amounts and put in place a deadline for further claims.
- Answer
-
According to the Financial Services Compensation Scheme (FSCS) a total of £3,108,532.87 was not reclaimed from Icesave accounts before the deadline for claims of 30 October 2009. This involved all amounts under and over £50,000. 2,010 depositors were involved. A deadline of 30 October 2009 was put in place for depositors with Icesave accounts because, as the UK branch of Landsbanki Islands hf, Icelandic law applies to the winding up of the bank. Icelandic law requires that all creditors must have submitted their claims against Landsbanki no later than 30 October 2009. Claims not registered by this date were extinguished. In addition, under the Financial Services Authority's rules, an eligible claimant cannot claim against the FSCS if the FSCS is unable to lodge a claim against the failed institution. Accordingly, the FSCS must reject an application for compensation if the liability of the relevant person (in this case, Landsbanki) to that depositor has been extinguished by law. Conversely, Heritable and Kaupthing Singer and Friedlander were UK subsidiaries of Icelandic Banks. The administration of these banks is therefore governed by UK law, under which an equivalent deadline does not exist. Therefore, there is not the same requirement to place a deadline for depositors to claim compensation for the money they had deposited with the banks. The FSCS is independent of the Government. Payment of compensation for amounts up to f50,000 is a matter for the FSCS. Under the rules covering FSCS payouts, the FSCS will continue to pay compensation provided that the relevant bank in question owes a legal liability to its customer.
Secondary information
- Type
- Written question
- Reference
- 9207; 727 c430-1WA
- Session
- 2010-12
- Related items
- Subjects
- Compensation Banks Insolvency Iceland Financial Services Compensation Scheme Landsbanki
- Link
- View this Written question on www.publications.parliament.uk
Librarians' tools
- Timestamp
- 2013-11-20 01:43:19 +0000
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