Powys to recoup its £4m

Smart thinking by bosses means Powys County Council will recoup most of the £4 million it invested in the Icelandic banks which collapsed eight years ago.
Unlike many local authorities, the council has twice decided against cashing in its currency that has been held in an account since the winding up of the banks.

A report to councillors says that by waiting until the final auction of currency earlier this summer the council has had the best financial outcome.

With the money now converted to Euros the council is now holding it under a better exchange rate.

A total of £3 million was invested in Landsbanki and Glitnir in 2007, and a further £1 million was put into Landsbanki in 2008 by Powys, before the country’s banking crash.

The council’s cabinet will hear on Tuesday that the winding up board of Glitnir made a full distribution to creditors in various currencies in March 2012, money in the form of Kroner placed in an “escrow” account, held in respect of the creditor and not accessible for any other purpose.

A currency auction was held by the Icelandic government in February last year but was one that Powys decided not to take part in as the price was not high enough.

Another chance to sell to Deutsche Bank was also rejected. Although it would have recovered just over 96 per cent of the amount deposited in Glitnir the sale would have resulted in a cash loss of about £179,000.