Iceland repays UK another £1.36bn to cover Icesave bail out

19th December 2014


The government has recouped a further payment of £1.36 billion from Iceland to pay for the cost of bailing out Icesave bank after its collapse.


Icesave, which is owned by Landsbanki, collapsed in 2008 but refused to pay foreign savers compensation. Thousands of British savers had ploughed money into the online bank after it offered savings rates far higher than were being offered elsewhere.


The government agreed to compensate British savers to the tune of £3.5 billion and the Landsbanki estate has been drip-feeding money to the UK Treasury over the cast six years and has now paid off 85% of the total.


Economic secretary to the Treasury Andrea Leadsom said the latest payment of £1.36 billion was another ‘significant milestone’ in recouping the cost to taxpayers of the financial crisis.


She said the government will continue to push for the entire £3.5 billion to be repaid.


‘A key part of our long-term economic plan is getting taxpayers’ money back from the financial crisis, including the collapse of Iceland’s banking system in 2008,’ she said.


‘I have been pressing ministers in Iceland to speed up the return of UK taxpayers’ money…the failure of the Icelandic banks cost taxpayers billions of pounds, with no certainty of ever getting the money back. We remain committed to recovering the full outstanding amount of the British taxpayer’s claim from the Landsbanki estate.’




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