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WILLIAMS QUESTIONS HANDLING OF ICELANDIC BANK CRISIS
November 3, 2008 9:26 AM
Liberal Democrat Shadow Secretary of State for Wales Roger Williams MP has today expressed his concern at the Government's handling of the Icelandic banking crisis, after it emerged that Alistair Darling may have known about the problems Icelandic banks were experiencing months ago.
Liberal Democrat Shadow Chancellor Vincent Cable questioned Alistair Darling in Parliament today about when the Treasury first knew about the Icelandic banks' problems, and whether he disregarded warnings about their precarious position, and has written to the Chancellor to clarify the position.
Roger Williams has written to the Auditor General for Wales, asking what advice had been given to local authorities in Wales. Under questioning by Mr Williams, Welsh Secretary Paul Murphy revealed he had not met with the Auditor General since the start of the crisis.
Commenting Roger Williams said:
"The more detail that emerges about this crisis, the more concerned I am that the Government have not done everything they could to avert it.
"It is astonishing that Paul Murphy did not contact the Auditor General as soon as this crisis emerged. Welsh councils have millions tied up in Icelandic banks, yet Ministers have been more intent on passing the buck than actually solving the problem.
"Now it seems that Alistair Darling may have known about these problems months ago, but did nothing to ensure that investments were protected.
"The Chancellor needs to answer these questions, or there will continue to be lingering doubts over the Government's approach to this issue."
Notes
The full text of Vince Cable's letter to Alistair Darling is below:
You will have seen the publicity over the weekend about your conversation with the Icelandic Finance Minister in which you refer to past conversations, some weeks or months earlier, in which you were misled by another Icelandic minister.
Since there is now great anxiety and distress amongst individuals, councils, charities and others who have lost large sums of money in Icelandic banks, it is important that we have a proper record of what assurances were given to the UK Treasury and when.
Can I remind you of the written questions in the House of Lords on 14 and 15 July, (attached), by my Treasury team colleague, Matthew Oakeshott which, had they been fully and properly answered at the time, could have alerted many people to the risks and protection involved. Why, in particular did the Treasury fail to answer his question about the assets of the Icelandic Compensation Scheme? Did the Treasury not know, and if so why did it not find out in July?
Can I therefore ask you to provide a full statement about the sequence of events which involved the Treasury and the FSA seeking reassurances from Icelandic and other sources; briefing themselves on the level of depositor protection available and to whom; and taking any necessary action to strengthen protection.
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