Skip to main content

Banks: Iceland

Volume 493: debated on Tuesday 2 June 2009

To ask the Chancellor of the Exchequer when he plans to respond to the recommendations of the Treasury Select Committee’s Fifth Report of Session 2008-09, Banking crisis: the impact of the failure of the Icelandic banks. (276930)

The Treasury is considering carefully the Treasury Select Committee’s recommendations and expects to respond to them in due course.

To ask the Chancellor of the Exchequer when he expects to lift the freezing order on the Landsbanki assets; on what criteria that steps will be taken; and if he will make a statement. (276931)

On 8 October HM Government made the Landsbanki Freezing Order 2008. The order was made because the Icelandic Government, its authorities and Landsbanki appeared to be on the brink of action which would be to the detriment of the UK economy, including detrimental treatment of UK depositors.

It is a measure that could be lifted once the Treasury is satisfied that action to the detriment of the UK economy has been addressed and will not proceed.

To ask the Chancellor of the Exchequer if he will publish the advice he received on use of powers under the Anti-Terrorism, Crime and Security Act 2001 to freeze assets in Icelandic banks; and if he will make a statement. (276932)

Treasury Ministers receive advice and input on a wide range of issues, from a variety of individuals and organisations in the public and private sectors, as part of the process of policy development and analysis. As was the case with previous Administrations, it is not the Government’s practice to provide details of advice given to the Treasury.

To ask the Chancellor of the Exchequer what his assessment is of whether the actions of the Government in respect of the crisis in Icelandic banks made the Government an active participant in the financial markets; and if he will make a statement. (276933)

Kaupthing Singer and Friedlander (KSF) the UK subsidiary of the Icelandic bank Kaupthing was regulated by the FSA, who was also in regular contact with the Icelandic regulator, FME.

As KSF’s position deteriorated the tripartite authorities worked intensively to find solutions to the firm’s problems. On 8 October the FSA decided that KSF no longer met the FSA’s threshold conditions and the firm went into administration.

Upon learning of the FSA’s decision, the UK Government moved swiftly to transfer some of the deposits of KSF to ING to safeguard depositors and financial stability within the UK.

The steps taken by the FSA and the Government had no bearing on the status of the parent company, Kaupthing Bank hf, which is incorporated under Icelandic law and subject to supervision by the FME.

To ask the Chancellor of the Exchequer how many times powers under the Anti-Terrorism, Crime and Security Act 2001 have been used to freeze assets in each year since 2001; and if he will make a statement. (276934)

The power under section 4 of the Anti Terrorism Crime and Security Act 2001 has been used on one occasion. This was in 2008 for the Landsbanki Freezing Order.

To ask the Chancellor of the Exchequer when he last discussed the Government's policy on Icelandic banks and the freezing of their assets with his Icelandic counterpart. (276935)

Treasury Ministers and officials have meetings and discussions with a wide variety of organisations in the public and private sectors as part of the process of policy development and delivery. As was the case with previous Administrations, it is not the Government's practice to provide details of all such meetings and discussions.