Braintree District Council has now recovered 95% of cash invested in Icelandic banks
- Credit: Archant
An Essex local authority has recovered an additional £74,000 it lost when the Icelandic banking system collapsed.
Braintree District Council (BDC) invested a total of £5million into three of the country’s banks – Landsbanki, Glitnir, and Kaupthing Singer and Friedlander – between 2007 and 2008
It was one of a number of authorities which lost cash when the Icelandic system collapsed in 2008.
However BDC has now been able to recover 95% of its total investment.
John McKee, deputy cabinet member for performance and efficiency at BDC, announced at a full council meeting today that an additional £73,878 had been recovered from the Glitnir Bank to reach the 95% total.
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The latest funds had been paid in Icelandic Krona but were locked in an account due to restrictions on international currency transfers.
But now BDC has been able to get some of the money back following a currency auction held by the Central Bank of Iceland, converting the cash into sterling.
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Mr McKee said: “As one of a number of authorities affected by the Icelandic Bank crisis we have been working closely with our intermediaries in the UK and Iceland to recover the investment made into the three banks.
“This is an ongoing and long process, and there is still work to do but we have now recovered £4,628,668 from our £5m investment into the three banks, with a further £111,000 still held in an Icelandic account and more than £30,000 still expected from Kaupthing Singer and Friedlanderf bank.”
The council had already seen £821,000 of the original £1m Glitnir investment recovered.
According to the Local Government Association a total of 104 local councils were caught out by the Nordic country’s financial collapse, between them investing tens of millions of pounds.
Colchester Borough Council completed a deal a year ago whereby it sold off its claims against Landsbanki to a third party.
The exchange meant it did not receive the full £4m it invested, but the authority said there had been no guarantee it would ever get the rest of the money.