UK and Iceland clash on crisis
By Tom Braithwaite, Jim Pickard and Alex Barker
Published: October 9 2008 22:48 | Last updated: October 9 2008 22:48
Britain was locked in an increasingly acrimonious dispute with Iceland on Thursday night after the nationalisation of the Nordic country’s largest banks put close to £800m of local authority money at risk and prompted Gordon Brown to threaten to seize the assets of Icelandic companies.
On Thursday, Iceland was forced to nationalise
Kaupthing, its biggest and last major bank, a move its prime minister blamed in part on the “action taken against the bank by the British government”.
Geir Haarde also criticised the British government for using anti-terror laws to freeze £4bn of bank assets. “Not many governments would have taken that very kindly,” he said.
The unprecedented move – criticised by legal experts as a distortion of the law’s intent – was used to protect the deposits of British account holders.
The action took place on Wednesday to freeze assets of Iceland’s second-biggest bank,
Landsbanki, which went into receivership this week.
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