Economic war between UK and Iceland Thursday, October 09, 2008
Image via WikipediaFollowing the collapse of Iceland's banking sector, the impact on the UK will have come as a considerable surprise to many. Yet the Icelandic banks have been aggressive players in the market for deposit and loans, as evidenced by the large number of depositors and borrowers affected.
The £1bn of deposits placed with Icelandic banks by Local Authorities, now at risk, will widen the pain across the UK via its' impact on local services. Similarly, many Charities will find themselves constrained because of their exposures.
Gordon Brown insists that Iceland has acted illegally with regard to failing to honour its deposit protection scheme and consequently has initiated measures to seize Icelandic assets.
This marks a dramatic escalation in events which will leave a deep scar on international relations. Notably, the UK actions will give a number of international companies operating in the UK cause for thought about emerging political risks, which they have probably never had to do before.
- At 11:30 PM, Jon Gretar said...
Gordon Brown is just using this opportunity to get some votes. He has finally found a country without an army against which he can stand real tough against and spew whatever he feels like saying.
But the fact is that he is responsible for putting the nail in the coffin of Iceland's biggest bank Kaupthing. It looked like it might weather the storm and had fixed it's finances enough to simply get a loan to help last week.
The Gordon Brown came along trying to fix his image and froze the UK assets of the company. Thus Brown has increased the amount of lost UK taxpayers money. He has in fact managed to make the whole situation even worse than it was. So people should be judging him but not gratulateing him on finally speaking up.
Brown has proved that with him in power the UK is not a good friend to have. It's not a friend that kicks you while you are down.