The list of local councils and charities and the amounts they had deposited in Iceland is astounding. But it does raise a big question — where were the sales reps from Lloyds, HSBC, Barclays, et. al.

Cheltenham Borough Council: £11 million in Iceland banks … Dorset County Council: £28.1 million … the list goes on and on.

So where were the bank salesmen doing what they should do best - asking English councils if they were really going to entrust their money to a bunch of cod fishermen living on a god forsaken island whose main feature is a huge glacier? Who knows, if the UK banks had kept that money on shore they might have enough to lend to each other.

One could call for more regulation although the record here, whether you look at the Bank of England or the US Federal Reserve, isn’t all that encouraging.

So bring on some aggressive fear-mongering British sales teams to stoke the native xenophobia.

What’s so hard about that?

Filed under: Credit Crunch, Retail Banking, risk