Written question asked by Lord Laird (Ulster Unionist Party), in the House of Lords. It was answered by Lord Sassoon (Conservative) on Thursday, 7 July 2011.

Banking: Iceland

Question: To ask Her Majesty’s Government, further to the Written Answer by Lord Sassoon on 20 June (WA 225), whether they will investigate further the reasons for 32 customers not reclaiming £167 million from Kaupthing Singer and Friedlander Bank despite the Government's guarantee of such Icelandic bank deposits over £50,000; why they are maintaining this open-ended guarantee; and when they estimate those banks' legal liability to customers will end.

Answer: The outstanding balance of £167 million in my previous Answer was in respect of Lansdbanki and Heritable Wholesale. The unclaimed balance provided for Kaupthing Singer and Friedlander Bank totalled around £250 million across 117 customers. Contacting retail depositors is the role of the Financial Services Compensation Scheme (FSCS). At the time of the failures, FSCS wrote to all depositors with a claim form and instructions on how to apply for compensation. The FSCS website contained information about how to make a claim. Since sending the initial letters, FSCS has carried out numerous follow-up exercises. The previous Chancellor of the Exchequer made public statements, guaranteeing that depositors would be compensated for their deposits, including amounts over £50,000. The Treasury issued press notices on 9 October 2008 in respect of all three banks, stating that all UK depositors would be refunded in full for their deposits. The length of a bank's legal liability to customers is driven by the law relating to limitation. It is not appropriate to estimate when this may end.

Secondary information

Type: Written question
Reference: 10689; 729 c90WA
Session: 2010-12
Related items: Banking: Iceland
Monday, 20 June 2011
Written questions
House of Lords; Banking: Iceland
Wednesday, 20 July 2011
Written questions
House of Lords
Subjects: Compensation Banks Deposits Insolvency Iceland Kaupthing Singer and Friedlander
Link: View this Written question on www.publications.parliament.uk