The BBC is reporting the headline: 'Councils may recoup Iceland cash'. If this constitutes good news for the City Council, then bad news doesn't bear thinking about.
What the article goes on to say is that Council's may recover 70-80% of their investment in Heritable bank - presumably this is just the capital, it doesn't mention interest. The City Council has £4m invested in Heritable, so could be looking at a further 20-30% of this amount, or £800,000 - £1.2m (remember annual Council Tax income for the City Council is only about £6m), currently unbudgeted, being lost. But, and its a big but, this is only the UK branch of the bank - the situation is likely to be much worse for the Icelandic parent bank Landbanski. It has previously been reported that the unsecured debt of this bank is trading at 10% of its value - so a much greater part of the £5m the Council has invested there could also be at risk.
I wonder if the BBC spin on this news comes from the Local Government Association, who apparently are being very helpful to local Councils tackling this problem - if I was being cynical I could imagine as much of this help was in deflecting criticism from Councils by managing news rather than actually making any difference to how much money is returned - they seem quite happy to spin on their own behalf (for example campaigning against elected police chiefs), and to protect Councils from legitimate criticism rather than concentrating on spreading best practice - I wonder how much the City Council pays them for this privilege...
1 comment:
No chance. No council will see a penny of their investments with the Icelandic Banksters. As a result of it's financial crisis Iceland now has a national debt of 850% - it is no longer a Country - it's a hedge fund.
During the 'ponzi boom' Iceland was Ferrari's biggest customer - even bigger than the USA with 1000 times the population.
If Cambridge City wants to recover anything it should appoint baliffs in Iceland to seize tangible assets - perhaps a few Ferrari's. These could then be shipped back and given to the Council's Pest Control staff as fast response vehicles to deal with the growing stray dog menace as the Council no longer has the funds to employ a dog warden
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