Heritable and Kaupthing Singer and Friedlander (KSF) are UK-based banking subsidiaries of the two Icelandic banks Landsbanki and Kaupthing. On 7 and 8 October 2008 respectively, the FSA concluded that Heritable and KSF no longer met their threshold conditions, and were in default for the purposes of the Financial Services Compensation Scheme (FSCS). The Treasury, using powers under the Banking (Special Provisions) Act 2008, transferred certain accounts of Heritable primarily used by retail depositors and KSF's Edge retail deposit business to ING Direct. The Government also committed to paying out in full FSCS eligible depositors whose accounts were not transferred. The remainders of Heritable's and KSF's businesses were subsequently placed into administration following due legal process.
On 8 October, the FSA announced that the UK-based branch of Landsbanki was in default for the purposes of the Financial Services Compensation Scheme (FSCS). To maintain financial stability and protect retail depositors, the Chancellor announced that all retail depositors with the Icesave brand of the branch would receive their money in full.
The Government have put in place arrangements to ensure that all FSCS-eligible depositors with the UK branch of Landsbanki, Heritable or Kaupthing Singer and Friedlander will receive their money in full. If a charity is eligible to claim compensation from the Financial Services Compensation Scheme, it will be entitled to benefit from these arrangements.
For local authorities, I refer the hon. Gentleman to the statement made by the Secretary of State for Communities and Local Government on 14 October 2008, Official Repor t, column 35WS.