Iceland to repay for lost savings
The Icelandic government has agreed to repay the UK cash lost when its banking system collapsed.
At the height of the crisis in October last year, the Treasury stepped in to loan the Icelandic government £2.3 billion to prevent UK savers losing money, as it was feared the Nordic nation's financial compensation scheme did not have sufficient funds.
UK savers with Icesave should have already received their funds back through the UK Financial Services Compensation Scheme (FSCS)
Iceland has now agreed to repay the amount with interest to the Treasury, and has brokered a similar deal with the Netherlands.
Commenting on the deal, a spokesman for the Treasury said: "This is good news for UK taxpayers and good news for Iceland.
"The government welcomes Iceland's commitment to recognise its obligations under the EC Deposit Guarantee Scheme to repay depositors in Icesave."
About 300,000 Britons held accounts with Landsbanki, which collapsed in October last year. The bank's Icesave brand attracted many depositors with its high interest rates.
However, the bank's savers were not protected under the UK's FSCS, instead via the Icelandic version.
The collapse saw a great movement of funds in savings providers - such as banks and building societies - that were registered in the UK with the Financial Services Authority.
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