Kaupthing Singer & Friedlander Limited (Determination of Compensation) Order 2008

I believe that that was precisely what drove the Chancellor of the Exchequer to write to the European Commission asking for a careful and considered review of the implications of the EEA passporting regulations in respect of regulatory oversight and the adequacy of compensation arrangements. I am not in a position to comment upon the management of individual Icelandic banks in Iceland or the action of the regulatory authorities in Iceland. I turn to the second point raised by the noble Lord, Lord Oakeshott. The Department for Communities and Local Government made it clear in its guidance to local authorities that they should have regard to risk and diversification rather than rate. As my noble friend Lord Campbell-Savours has noted, the deterioration in the health of Icelandic banks, as indicated by the rating agencies, was information that informed investors should have been taking into account. The Treasury, however, does not direct local authorities in respect of their deposit placement activities.