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Councils hit by Icelandic banks Councils hit by Icelandic banks
(about 2 hours later)
A quarter of Welsh councils say they have investments worth millions of pounds in Icelandic banks which have gone into receivership. Five Welsh councils say they have investments worth millions of pounds in Icelandic banks which have gone into receivership.
It is understood a sixth council may also have a substantial amount invested in banks in Iceland.It is understood a sixth council may also have a substantial amount invested in banks in Iceland.
At least £12m is tied up at Landsbanki and another institution, Glitnir.At least £12m is tied up at Landsbanki and another institution, Glitnir.
Local authority leaders are calling for an urgent meeting with the chancellor. The UK government has frozen all the British assets of Landsbanki.Local authority leaders are calling for an urgent meeting with the chancellor. The UK government has frozen all the British assets of Landsbanki.
It follows the decision by Iceland's government to take over the company, which ran the internet bank Icesave, leaving 300,000 UK residential customers unable to access their savings.It follows the decision by Iceland's government to take over the company, which ran the internet bank Icesave, leaving 300,000 UK residential customers unable to access their savings.
The amounts ought to be small enough even for a relatively small authority not to take a big hit against its budget Tony Travers, director of the London School of EconomicsThe amounts ought to be small enough even for a relatively small authority not to take a big hit against its budget Tony Travers, director of the London School of Economics
Calls to councils in Wales have revealed that Powys council alone had invested £4m in the banks.Calls to councils in Wales have revealed that Powys council alone had invested £4m in the banks.
Flintshire council has confirmed that it had banked £3.7m with the institutions, while Rhondda Cynon Taf had deposited £3m.Flintshire council has confirmed that it had banked £3.7m with the institutions, while Rhondda Cynon Taf had deposited £3m.
It is also known that Monmouthshire council had accounts worth £1.2m, and that Ceredigion council had also invested an undisclosed sum with Icelandic banks.It is also known that Monmouthshire council had accounts worth £1.2m, and that Ceredigion council had also invested an undisclosed sum with Icelandic banks.
A number of English council's also have money invested.A number of English council's also have money invested.
'Risk''Risk'
A spokesperson for the Welsh Local Government Association (WLGA) said the situation was being "carefully monitored".A spokesperson for the Welsh Local Government Association (WLGA) said the situation was being "carefully monitored".
In a statement, the WLGA added that councils are "clearly concerned at the security of their investments but it is too early to say whether they are at risk".In a statement, the WLGA added that councils are "clearly concerned at the security of their investments but it is too early to say whether they are at risk".
It added: "The local government associations around the UK have now made direct approaches to the Treasury to get the Chancellor to provide the necessary cover for public sector investments which have been undertaken in accord with normal practice."It added: "The local government associations around the UK have now made direct approaches to the Treasury to get the Chancellor to provide the necessary cover for public sector investments which have been undertaken in accord with normal practice."
COUNCILS AFFECTED Powys - £4mFlintshire - £3.7mRhondda Cynon Taf - £3mMonmouthshire - £1.2mCeredigion - undisclosed Source: BBC Wales Dragon's EyeCOUNCILS AFFECTED Powys - £4mFlintshire - £3.7mRhondda Cynon Taf - £3mMonmouthshire - £1.2mCeredigion - undisclosed Source: BBC Wales Dragon's Eye
The Local Government Association, which represents all 400 councils in England and Wales, said it did not expect significant financial problems for local authorities in the short term.The Local Government Association, which represents all 400 councils in England and Wales, said it did not expect significant financial problems for local authorities in the short term.
Tony Travers, director of the London School of Economics said councils exposed to this risk would have been unlikely to all their monies in just one bank.Tony Travers, director of the London School of Economics said councils exposed to this risk would have been unlikely to all their monies in just one bank.
"The amounts ought to be small enough even for a relatively small authority not to take a big hit against its budget and therefore, while there might be a impact on the council budget, it's not going to be a huge one," he said."The amounts ought to be small enough even for a relatively small authority not to take a big hit against its budget and therefore, while there might be a impact on the council budget, it's not going to be a huge one," he said.
However, one senior Welsh council official, who did not want to be identified told Dragon's Eye: "It's going to be a long time to work out the ramifications of this - in the meantime, it is very worrying."However, one senior Welsh council official, who did not want to be identified told Dragon's Eye: "It's going to be a long time to work out the ramifications of this - in the meantime, it is very worrying."
'Discussion''Discussion'
Chancellor Alistair Darling has said that he will ensure all UK savers with accounts with the closed internet bank Icesave will get all of their money back.Chancellor Alistair Darling has said that he will ensure all UK savers with accounts with the closed internet bank Icesave will get all of their money back.
But the position with corporate investors, such as councils, is less clear.But the position with corporate investors, such as councils, is less clear.
The matter is likely to be the subject of intense discussion at the annual meeting of the WLGA, which begins in Llandudno on Thursday.The matter is likely to be the subject of intense discussion at the annual meeting of the WLGA, which begins in Llandudno on Thursday.
However, 11 Welsh councils have confirmed that they do not have any savings with Icelandic bodies. The councils are: Anglesey, Blaenau Gwent, Carmarthenshire, Conwy, Denbighshire, Pembrokeshire, Newport, Swansea, Torfaen, Merthyr Tydfil, and Wrexham.However, 11 Welsh councils have confirmed that they do not have any savings with Icelandic bodies. The councils are: Anglesey, Blaenau Gwent, Carmarthenshire, Conwy, Denbighshire, Pembrokeshire, Newport, Swansea, Torfaen, Merthyr Tydfil, and Wrexham.
A further six authorities have yet to provide any information: Cardiff, Neath Port Talbot, Gwynedd, Caerphilly, Vale of Glamorgan, and Bridgend.A further six authorities have yet to provide any information: Cardiff, Neath Port Talbot, Gwynedd, Caerphilly, Vale of Glamorgan, and Bridgend.
Dragon's Eye begins its new series on Thursday 9 October on BBC 2W at 2100 BST and on BBC One Wales at 2235 BSTDragon's Eye begins its new series on Thursday 9 October on BBC 2W at 2100 BST and on BBC One Wales at 2235 BST