TAXPAYERS are being urged not to panic over the Icelandic banking crisis, which has put £8m of Daventry district residents' money at risk.
Yesterday (Thursday) Daventry District Council (DDC) announced it has £8 million of its reserves invested in collapsed Icelandic bands, used to assist in the running of services.
The money is spread across four of the banks - £3 million in Landsb
anki, £1 million in Heritable, £2 million in Glitner and £2 million in Kaupthing Singer and Friedlander.
Chris Millar, leader of DDC, said: "I would reassure residents that there will be no immediate effect on the way in which we deliver our services. We have substantial reserves specifically set aside as a contingency for unforeseen events, such as this, in the short-term.
"Like the majority of UK councils, DDC deposits its funds in banks and other financial institutions worldwide to earn interest income to help fund services to the public.
"The council's strategy is to spread its investments and limit the amount of deposit so as to minimise risk and this investment strategy is in accordance with Government and Chartered Institute of Public Finance guidance.
"With the current global economic crisis, these are unparalleled times and all investors are in a real dilemma. As a council we act as prudently as we can, continuously reviewing our investments, but we would need the Government to give confidence to public sector investors at this time by guaranteeing deposits in the many institutions affected.
"We are actively reviewing our investment strategy on an ongoing basis to minimise any further risk to our investments. This is being done in conjunction with specialist investment advisors regulated by the Financial Services Authority.
"It extremely difficult to anticipate changes in the fortunes of individual institutions and the financial markets in these unparalleled times."
At a district council strategy meeting last night (Thursday) members agreed to give special delegated powers to Cllr Millar, managing director Simon Bovey and executive director Paul Hammond to make quick financial decisions should it be needed.
For a full report see the Daventry Express (October 16).
