CHESHIRE County Council is seeking Government clarification with regard to more than £8m the authority has invested in Icelandic banks and their UK subsidiaries.
The authority has £8.5 million invested with Heritable Bank, a UK subsidiary whose parent bank Landsbanki has recently been put into administration by the Icelandic government.
County council spokesman Ian Callister said: “While the money is apparently at risk because the bank has frozen all its assets, the situation remains highly complex and is changing daily.
“For instance, we understand that the UK Government has frozen the assets of Icelandic UK subsidiaries.”
Added Mr Callister: “The money was invested in accordance with the Treasury Management Strategy to spread the risk by placing deposits with a large number of highly credit-rated institutions and to get the best possible return for our council tax payers.
“It was approved by council and managed in line with best practice principals and Government guidelines.
“Consequently we are liaising with the Local Government Association in an attempt to establish whether the Government will give similar protection afforded to individual savers.”
Cheshire County Council has a gross budget of £1 billion and £200 million invested with national and international financial institutions. The Heritable Bank investment represents just 4% of the authority’s total portfolio.
A city council spokesperson confirmed the Chester authority had no money invested in Icelandic financial institutions.