A British conservative MP had some choice words for those who put their money in Icesave, stating that they should have known better than to believe the interest rates being promised by the company.
As many know, Icesave was effectively an online branch of Landsbanki. Many people, from students and parents to pensioners and charitable organisations, were attracted to the interest rates being promised. When Landsbanki collapsed, however, it came to light that the company could not cover the deposits, prompting the British and Dutch governments to cover the losses themselves, and then turn to the Icelandic government to cover them in turn. The matter remains unresolved today, nearly three years after the fact.
Treasury select committee member David Ruffley, speaking at a panel session on the Financial Conduct Authority held by The Financial Services Forum and Lansons Communications last week, said that those who were attracted to and trusted in the promised interest rates were “morons”.
Ruffley said: “If you looked at an Icelandic bank and said ’the savings rate is up to three times what you can get in the UK’, you are a moron. Were you a moron to think that there was some magic the Icelanders had come up with, a tiny economy whose banks were offering fantastic savings rates? I think you were probably a bit dim. Something should have twigged and I think, in that case, buyer beware.”
MoneyMarketing reports that Lifesearch managing director Tom Baigrie, a delegate at the event, responded to the comments saying: “It is very hard to call everybody stupid. There has to be a system which helps mitigate against even very clever people apparently being ’morons’.”