U.K., Iceland In Bank Row; Leaders Exchange Barbs

Thu, 09 Oct 2008 20:14:25 +0000
AHN Staff

London, U.K. (AHN) - The British government has begun freezing assets of Icelandic firms in the U.K. in retaliation for Reykjavik's decision to hold deposits of Britons in a collapsed bank it took over.

British Prime Minister Gordon Brown said Thursday he has informed his Icelandic counterpart Geir Haarde of the asset freeze and threatened legal actions against Reykjavik for declaring Landsbanki insolvent.

Brown described Iceland's decision as illegal and unacceptable as 300,000 British depositors of Landsbanki's U.K. subsidiary IceSave could no longer access their accounts.

Haarde expressed displeasure over London's action. "I realized that a terrorist law was being applied against us," the Icelandic prime minister said, according to BBC News.

U.K. Chancellor Alistair Darling, the cabinet minister in charge of economic and financial matters, has promised to protect the depositors.

Meanwhile, officials of U.K. towns and government agencies asked cabinet ministers Thursday to help them recover an estimated one billion pounds they have invested in Icelandic banks.

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