submariner - at least your Heritable savings are fully protected up to £50k by the FSCS as Heritable is a UK registered bank (which Icesave is not).

Things can get a lot worse yet. We might feel a bit foolish about putting our money in Icesave now with the benefit of hindsight, but we were all taken in by the promised compensation scheme. That scheme was designed for individual banks going under, not a major collapse of the whole system. The depositor scheme will find it difficult to cover our first 20,000 euro losses, and if there is a major collapse in the UK the remainder of our funds are at risk too.

What about Iceland? They face a complete collapse of their banking system, with no access to personal bank funds, no petrol at the pumps and no pay cheque at the end of the month. Lets hope UK is not next. We seem to be relying entirely on 'consumer confidence' to avoid this scenario in the UK at present. Bland statements such as the government should guarantee all deposits miss the point - the money is just not in the system - and never was1

That's just scaremongering rikkix. The UK government backs the FSCS, and the GDP of the UK is enough that the UK government would be able to handle any UK deposit bank's demise, or several of them. The problem in Iceland is that they are a small country (300,000 inhabitants, equal to the number of Icesave UK depositors!) and stretching their government's finances to cover the guarantees is not to be taken lightly.

Your description of life in Iceland is gross hyperbole, and suggesting the same for the UK is plain ridiculous, even in this world of failing banks and huge sharemarket losses.

I would be absolutely amazed if UK account holders were cast adrift by the UK government. It would indeed set a prescedent. At the end of the day, ICESAVE are (presumably) registered and therefore approved by the FSA with the knowledge that Britons would be depositing savings with them. As such, they would have been thoroughly vetted so one would think there is some responsibility on the FSA, BofE and the Treasury to ride to our rescue - as they have done with (eg) Northern Rock. For all intents and purposes ICESAVE is a UK bank.

The real Cynic in me would point to the fact that Gordon is fighting from a corner right now and what he certainly doesnt need is 300,000 IceSavers deciding right now that whatever happens they WON'T be voting labour at the next General Election!

It seems however that there is indeed some reciprocal agreement between the Nordic countries (excl Finland) to come to each others aid in times of economic crisis. One would hope therefore that if the Icelandic govt cannot afford to bail out the compensation scheme (and figures of £4.5B have been touted), then Norway, Sweden & Denmark would jump in.

Also worth noting that the Russians are by all accounts sniffing around and offering cash injections - apparently a delegation from the Icelandic govt is planning on heading to Moscow "this week". This does potentially make sense from a Russian strategic foreign policy view point as Iceland is a former cornerstone of NATOs submarine defence barrier into the North Atlantic. With the current resurgence of a 'cold war' one might suspect that in return for roubles, Iceland would be 'asked' to refrain from agreeing to such a role in the future. Iceland themselves have virtually accused the rest of the world (UK/US???!) of deserting them at this time of crisis, so Russian overtures may seem rather attractive whatever the 'payback'.

In summary, whether its the Treasury, the Icelandic comp fund, or the Icelandic govt - with Russian or Nordic money, one would hope that Icesave depositors money is fairly safe (up to a limit of course - though lets see what tomorrows news brings with regard to a Treasury rescue package).

Talking of foreign investment in Icelandic banks - did you know that a member of the Qatar royal family is the third largest shareholder in Kaupthing? Perhaps middle eastern oil money/investment might also be called on to help bail out the country's economy.

http://www.ft.com/cms/s/0/0dcf8fec-88c1-11dd-a179-0000779fd18c.html

Looks like a rescue package in the offing - not sure how this affects Icesave and I guess that will depend on what the 'split' actually involves http://news.bbc.co.uk/1/hi/business/7657422.stm

Whatever, this is surely going to go a long way at restoring some confidence in the banking system.

isioth, the impending rescue package that you refer to is partial nationalisation of UK banks - there is no mention of anything that will help Icesave depositors.

.............unless of course the 'split' which I referred to means that effectively Icesave is passed over to UK ownership be that Nationalisation or to another bank.

It is also likely that the $700B US rescue package will or could be used to help non US banks operating inside the US, therefore its just possible that said UK rescue may do the same.

can a 2nd a/c holder be added before any insolvency and one's safety net raised 2 £100000 do u think?

Does the attached link offer a glimmer of hope?

http://www.landsbanki.is/english/aboutlandsbanki/pressreleases/?NewsID=13284

kev2006n:

Does the attached link offer a glimmer of hope?

http://www.landsbanki.is/english/aboutlandsbanki/pressreleases/?NewsID=13284

Unfortunately not, as far as I can see. It seems to me that the Icelandic government is only concerned about the protection of their own citizens' deposits. Landsbanki are still allowing them to withdraw their (also our) money. If we are not going to be protected by the Icelandic government then surely we need to be protected by our own. We trusted the assurances we were given on the Icesave website.

To those who are basically saying 'I told you so', I can only say that find your lack of compassion deeply depressing. Not everyone is a money expert or even reads the financial pages of the newspapers. I don't doubt in future that we will be doing but these are unprecedented times (at least in my life time) and I believed the assurances I was given. I also didn't want to suddenly force the bank into collapse by adding to the panicked withdrawals. Naive? Perhaps. But it's hardly a crime which should bar me (and all the others) of compassion.

I am a self-employed author and have used my Icesave account to deposit all earnings, both for tax and living purposes. One of the things that attracted me to the account was the ability to set up regular payments out of it without losing interest, in effect paying myself a salary. I did this as a way of managing my monthly money. Even if we do receive compensation eventually, I have no means of paying my rent in the meantime, nor my bills and basic living expenses.

redunderthebed:

Surely you don't think the Tories would prop up an Icelandic bank do you?

But my main point is.... why would anyone invest in an Icelandic bank in the first place???

This is the sort of comment I find depressing

redunderthebed:

As a tax payer I don't want my hard earned revenue being squandered on greedy people who should have had more sense!

As regards the banks, let these over-bloated financial monsters meet the end they deserve, and good riddance.

And this. Where's your humanity?

Alistair Darling said on GMTV this morning that he will stand by the Icesave customers. He said that although Iceland had defaulted on its obligations, he would announce a rescue plan in the House of Commons.

may:

Alistair Darling said on GMTV this morning that he will stand by the Icesave customers. He said that although Iceland had defaulted on its obligations, he would announce a rescue plan in the House of Commons.

He said the same on the Today programme this morning, after saying the Iceland PM told him yesterday that Icesave's UK obligations would not be met, adding that the rescue fund in Iceland seemed empty. Fingers crossed.

That's the last time I have anything to do with Iceland. I withdrew my money from Kaupthing yesterday.