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Iceland wins legal battle over failed bank

Iceland wins legal battle over failed bank
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Iceland has won a legal battle over its reponsibilities to British and Dutch savers who lost money when an online savings bank collapsed.

The European Free Trade Association court said Iceland did not have to guarantee minimum levels of compensation when Icesave went bust.

Jóhanna Sigurdardóttir, the country’s prime minister said: “It is quite clear that this judgement will add force to the economic rebuilding in Iceland. Possibly the ratings agencies will revise their results. This will also have a positive influence on the lifting of capital controls.”

The EFTA surveillance authority argued Iceland had a duty under EU law to guarantee a minimum compensation within a time limit to foreign savers.

The ruling may scupper attempts by the British and Dutch governments to claw back money from the Icelandic government.

Both countries ended up stumping up the cash to compensate their citizens.

The ruling by judges in Luxembourg cannot be appealed.