Lewes Forum thread

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Icelandic banks

On 16 Oct 2008 at 8:47am ROK wrote:

According to the local government association, the banks were only downgraded to "dodgy" credit ratings by some credit agencies on 30th September. How "independent" are these agencies?

On 16 Oct 2008 at 2:34pm Sylvia wrote:

According to the news, the Audit Commission itself had invested 10 million.
in Icelandic banks. No wonder lots of other organisations were caught, if they followed their advice!!!

On 16 Oct 2008 at 4:36pm MC wrote:

The company that produces the most authoritative credit ratings for banks is considered to be Moody (www.moodys.com). There are (at least) another two other agencies. They are supposed to be entirely independant of the Goverment (they are private companies anyway).
The best banks have a triple A credit rating (AAA). These banks are deemed to have lots of deposits and not much debt (like borrowing from other banks and mortgages). I don't think the Iceland banks ever had top notch ratings (they may not even have had A ratings).
The were concerns about the Icelandic banks as far back as May with one agency concluding that Icelandic banks were facing "increasing vulnerabilities" and concluding, "the risk is clearly higher than that of most other advanced banking systems".
Icelandic bank, Glitnir, saw its credit worthiness downgraded in April. The credit agency said Glitnir at that time had the "lowest rating of virtually any western European bank."
Even though the credit-rating for short term investments (less than 12 months) remained unchanged until just a few days before the banks went down, other indicators showed clearly there was a problem.
If a plumber realised three months ago that his money wasn't safe enough in an Icelandic bank you'd have thought that the Councils and the Audit Commission should have too.

On 17 Oct 2008 at 1:19pm smeds wrote:

Did ESCC lose anything, anyone know?

On 17 Oct 2008 at 2:09pm ROK wrote:

I understand that Lewes district have 1million with Landsbanki, West Sussex 14million, Sussex Police nearly 7million and ESCC haven't any investments in Iceland. But the county leader, Peter Jones is on the Sussex police authority and is a director of the Audit Commission, who have 10million with Icelandic banks.