Negotiations to resolve the Kaupthing Singer and Friedlander situation could be delayed by the collapse of the Icelandic government.
Yesterday, conservative Prime Minister Geir Haarde announced he and his cabinet were resigning after months of protests in Reykjavik.
The news will be a blow to Kaupthing Singer and Friedlander depositors, as the United Kingdom and Iceland were in talks over the bank and its sister company in the UK.
Treasury Minister Allan Bell says the Isle of Man has had no direct contact with the government in Iceland over the affair, but believes the resignations could delay vital talks.
He told Manx Radio:
"Our link with Iceland has been through the Resolution Committee, which was set up to manage the affairs of the old Kaupthing Bank.
"Nevertheless, the resignation at this point of the entire Icelandic government I'm sure will have some impact on the negotiations which are taking place between the UK Treasury and the Icelandic authorities.
"But that might only be to perhaps slow down some of the proceedings, rather than actually arrive at a different solution."
(Picture: Geir Haarde, from iceland.org).
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