City invested £42m in Icelandic banks despite warning signs

An update on the £42 million that the City Council invested in Icelandic banks.

“ORGANISATIONS across the East Midlands decided it was dangerous to have their cash in Icelandic banks as Nottingham City Council began investing £42m.

The city council has been widely criticised for continuing to plough public money into the banks and ignoring warning signs they were in trouble. It has now emerged a number of other organisations took note of the warning signs:

Rushcliffe Borough Council was advised in April 2007 not to invest any of the £45m it had available in Iceland because it had “significant” debts. This was the same month the city council made its first deposit.

Notts County Council also rejected Icelandic banks deposits because they seemed less likely to get Government help if there was a crisis.North West Leicestershire District Council took £6.5m out of the banks in February. Rainbows Children’s Hospice withdrew £600,000 from Icelandic banks – the day before the city council made its last deposits…

Rushcliffe said it was told last spring to remove the banks from its list of potential places to invest by its independent financial advisers Arlingclose Limited…

A city council spokesman said: ”We last met our advisers as late summer and at no time received any warning about Icelandic banks. We, along with many other public bodies, did not get the information we needed to prompt us to withdraw investments from those banks.”

To read the full story follow the link below.


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