Ealing Council's Investment in Icelandic Bank

Fears are being raised that two million pounds of Ealing taxpayers' money could be lost during the financial turmoil facing Icelandic banks.

The council has two million pounds invested in the Icelandic bank Glitnir which has been taken over by the Icelandic Financial Services Authority.

Now concerns are mounting that if the bank is nationalised, the council will be at the end of a long queue to get the money back.

Labour Leader, Cllr Julian Bell said: "I have seen documents from February 2007 which stated it would be a risky option investing the money in Glitnir.

"Although we could not have foreseen the current financial turmoil, the warnings should have been heeded.

"I am concerned that the council is not being straight with people and have only said they are not involved in the banks which are failing such as Landesbanki.

"But they have £2m invested in Icelandic bank Glitnir and being overseas investors, we are at the back of the queue to get our money back.

"It won't affect services provided as the council has balances but we will just have to wait and see what happens."

A council spokesperson said they were reassuring residents that there will be no adverse impact on council services.

The spokesperson said: "Ealing Council has no investments in the failed Icelandic banks Landesbanki and Heritable and have followed best practice to spread its investments as widely as possible to ensure the maximum return for our investments without compromising the safety of the council's cash.

"Risk management plays a fundamental role in our investment activities, and due to the value of transactions involved safety and risk awareness always remains the priority over returns."