Tuesday, October 07, 2008

The impact of Icelandic meltdown.

I take a bit of an interest in Iceland, ever since we spent a very enjoyable holiday in Reykjavik a few years back. Its wet. Its also incredibly interesting. The geological features are like nothing I've seen before. It was fascinating to stand beside Stokkur, a geyser which erupts to a height of anything up to 75 feet approx every 5 minutes - and see the Mid Atlantic Ridge, where the recent movements of tectonic plates are visible on the land surface. I really loved watching the puffins when we were out whale watching - and ate some of them for dinner.

We saw many dolphins, playing hide and seek under our boat when we were out in the Atlantic, and shy porpoises and distant whales. Speaking of Wales, and after reading today's stories of economic meltdown of the Iceland economy started me thinking what this would mean if it happened to us in the UK. And then to thinking what impact the collapse of Icelandic banks might have on Wales. Well, none you would think. But that's not what I'm hearing. I'm told that these banks have been offering attractive terms for the temporary deposit of spare funds, and that some Welsh councils have several million invested with Iceland's beleaguered banks. Yesterday, this money was cast iron safe. It doesn't look so safe today. It really would be interesting to know just how much money is involved. There is also very good salmon fishing in Iceland. And the Icelandic Horse is a popular export. It has a unique gait. But it will take a lot of fishermen and horse buyers to put the Icelandic economy back together.


Anonymous said...

Welsh councils put some of their eggs in Icelandic Banks? What was wrong with putting their yolks in a building society? Safe as houses! Iceland will cough up some fish, maybe even a few dead whales - fancy putting good honest Welsh dosh into a county that still believes in hunting whales.

Frank Little said...

Don't finance officers read the financial pages? It was clear from exposés over the last few years that there were some prominent Icelandic entrepreneurs who were taking investments on a wild ride. Given the large ratio of funds at risk in these small (by world standards) banks, Iceland is not the régime under which I would have chosen to place other peoples' money.

Glyn Davies said...

anon and Frank - since I learned that Telford and Wrekin Council had withdrawn its six million pounds from Icelandic banks, on the basis of information available to all, your points take on a greater relevance.