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Iceland bank to sue Britain over freezing of assets
Jonathan Prynn, Consumer Affairs Editor06.01.09
THE Icelandic bank which had its British offshoot placed into administration by Gordon Brown at the height of the autumn credit crisis is to sue the Government over the move.
The Treasury placed Kaupthing Singer and Friedlander in administration on 8 October, at the height of Iceland's financial crisis, saying it was doing so to protect British retail depositors.
Iceland has long been angry at Britain's handling of the situation, which included the use of anti-terror legislation to seize the assets of Icelandic bank Landsbanki. A day later, Iceland took control of Kaupthing, the last of the three biggest commercial banks taken over as the north Atlantic island's financial system collapsed under the weight of tens of billions of dollars in foreign debts. "The Resolution Committee of Kaupthing has decided to sue the British Government and has the full support of the government," a press release from the Icelandic prime minister's office said.
Iceland has argued that Britain's actions helped bring about Kaupthing's failure prematurely.
Mr Brown and the Treasury have stood by the decisions taken. A Treasury spokesman said it was not aware of any legal action. He said that the Financial Services Authority had judged Kaupthing's UK subsidiary to be unable to meet its obligations to depositors.
Reader views (9)
Brown and Darling are to blame for this fiasco.
It is always political and the small fry always lose as the big ones are worth their weight in votes 
- Ben Matlock, US
Good luck to Iceland and I hope they do sue Brown, it was he who encouraged Councils to invest in Icelandic banks because of the high interest being offered and not looking at the risks involved which seems to be how he has run UK for last 10 years and now we all have to suffer
- Mike, London England
I work for Kaupthing Singer & Friedlander (although not for much longer obviously!) We, the UK subsidiary, are a UK registered bank and have been for 101 years yet, while the Scottish banks get bailed out (notice most of the cabinet are Scottish), Alistair Darling closed us down. They did this by seizing our deposit accounts and giving them to ING, a Dutch bank. Until that moment we were completely solvent (and, unlike most UK banks, still profitable) and in fact the previous night lent £80m spare cash to the Bank of England - at a time when most UK banks were borrowing from the BoE. Now the administrators are earning a fortune winding down the bank. Therefore, the local councils with money tied up with us should blame the central government for closing down a bank without reason. They guaranteed £6.5bn of Landsbanki deposits 100% even though they didn't need to, as a vote winner, then panicked at the thought of guaranteeing ours and closed us down instead.
- Freddie, London, UK
Gordon should be warned that Iceland have only ever fought one war (against us) and they won, and that was only over cod. These people do not give up easily, I know I married one.
- Jimbob, Kensington
I hope they sue Gordon Brown and win - and can they also ensure that they also sue him and every member of his cabinet personally so that we can see the shirts taken off their sorry backs.
- Thomas, London, UK
What is it with this government and these anti-terror laws?.
Just how can a bank in a European country be considered a terror threat?. I suspect the very act of using anti-terror laws in this case might in itself be criminal. I wonder who authorized this one?.
- Steve, London
Yes and Landsbanki should be sued too for advertising mega high interest rate savings accounts which it couldnt service suckering in poor Joe Public when clearly it knew its future was on the rocks.
- Wallytrader, London
GO Iceland, you have my full support too. Grodon, the unelected Stalinist deserves whatever you throw at him.
- David, London
Yes, it was not just householders who were victimised by Gordon Brown's Stasi "anti-terror" laws. Even a bank got the treatment. So no one and no institution is safe. Brits, wake up for God's sake and rebel!!!! What's the matter with you all? Why sre you all so cowed?
- Js, quebec
