Kent "arrogant" in face of damming report on Icelandic banks
March 31, 2009 12:00 AM
Kent negligent in handling of deposits in Icelandic banks
Kent County Council is arrogant and two-faced in its response to the Audit Commission (AC) report on Icelandic banks. The report names Kent as one of seven local authorities who were 'negligent' in their handling of deposits. KCC has responded by pointing out the AC itself had deposits in Iceland.
Trudy Dean, Lib Dem Leader remarked "KCC reminds people repeatedly that it has been rated as an "Excellent" Council. It was the Audit Commission who gave them that rating. They can hardly bask in the glory of one opinion, then dismiss another in such an arrogant manner".
"The Audit Commission Report concentrates on the facts - KCC broke its own Treasury rules AND £3.3million was deposited because no one read the email warning KCC against further deposits. In December 2008 and again last month, Price Waterhouse Coopers made exactly the same criticisms. How many times do KCC have to be told they got it wrong before they say "Sorry" ?".
Notes for information:
KCC has deposited a total of £50m in Icelandic banks some on behalf of Kent Superannuation Fund, Kent Police Authority, Kent Fire and Rescue Service and District Councils including Tonbridge and Malling Borough Council.
Money deposited in Heritable Bank has already been confirmed as covered by the bank's assets and is likely to be recovered substantially less the receivers costs, which may be as much as 10%.
Glitnir and Landsbanki are based in Iceland and deposits there are subject to a ruling on whether KCC retains its preferred depositor status which may be challenged by other depositors.
Graph:
The solid blue line shows the official exchange rate (EUR per ISK) of the Central Bank of Iceland (01.09.08 to 28.11.08).
The solid brown line shows the reference rate quoted by the European Central Bank during the same period.
The blue and brown lines diverge at the start of the 2008 Icelandic financial crisis.
The black dashed line is the average exchange rate from January to August 2008 (EURISK = 113.31), while the green dashed line is the average exchange rate from 1999 - 2007 (EURISK = 83.423).
Minor differences between the CBI rate and the ECB rate during September 2008 are due to the different times (during the day) that the rates are quoted.