The number of councils with deposits in Icelandic banks has now passed 100. Meanwhile there are fears for other parts of the public sector.
Now I’ve just been shown a letter sent to Alistair Darling today by the Charity Finance Directors’ Group. Read more
I can’t wait to see the minutes of yesterday’s MPC vote. Are we really expected to believe that this was a free vote – given the concerted nature of interest rate cuts around the world. Was there any vote at all? Was it unanimous for a 50 basis points cut? Were members told (by Mervyn King) they should vote for it? No doubt about it; the integrity of the monetary policy committee is today under question; or should be.
Most of the councils that have “lost” money in Iceland’s banks are big enough to cushion the blow. Cheltenham Borough Council may be the exception. It put about £11m in three of Iceland’s banks, which amounts to about 12 per cent of its budget. Ouch. Will the chancellor have to lend them a hand? Here is the full statement:
Cheltenham Borough Council has deposits of £11 million invested across the following three Icelandic banks: £3m Glitnir Bank (now nationalised), £5m Landsbanki (in administration) and £3 Singer and Friedlander (at the time of investment, was a British merchant bank, but subsequently acquired by Icelandic bank Kaupthing, which has been nationalised today). The deposits have various dates of maturity. The earliest maturity date for council deposits in Landsbanki is for a £1 million investment to mature in December 2009. Read more
The US is reportedly considering part nationalising its biggest banks, a plan that bears a remarkable resemblance to the UK’s £400bn rescue package. When Gordon Brown claimed he had “led the world” on Wednesday, he meant it. Indeed, when he made that boast, you have to assume he knew what the Bush administration was up to.
The timing is interesting. Over the weekend, officials were guiding us away from expecting any proposals this week. The chaos in the markets forced their hand. We’ve assumed they wanted more time to work through the details. But could there be an additional reason? Read more