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Roll up for the bank of Breckland!

PUBLISHED: 10:25 27 February 2009 | UPDATED: 15:03 07 July 2010

A Norfolk council with £12 million currently tied up with failed Icelandic banks has invited other councils to borrow cash from it. Breckland Council is looking at becoming a lender to other local authorities as a way of spreading its risk to the financial markets - especially banks - in the current economic crisis.

A Norfolk council with £12 million currently tied up with failed Icelandic banks has invited other councils to borrow cash from it. Breckland Council is looking at becoming a lender to other local authorities as a way of spreading its risk to the financial markets - especially banks - in the current economic crisis.

Rob Barlowe, Breckland's assistant director (governance), said yesterday: “We are actively seeking with other local authorities if they would be interested in borrowing from us instead of us going out investing.

“Because our set criteria of who we invest with is so high for the year ahead there might be days we struggle to find places to put our money.”

He said it is something council have done, loaning to drainage boards, health bodies and others, but this is normally through a broker.

“We have sent a letter to the majority of councils in the UK asking if they have short term borrowing needs to let us know,” he added.

Breckland has a total of £33.5million in investments in banks from HSBC and Norwich and Peterborough Building Society to the Icelandic banks.

At a meeting of Breckland's cabinet on Tuesday Mr Barlowe said there were creditor meetings being held with the Icelandic banks at the moment and the council still would not know times of when they could get their cash back.

The meeting agreed how Breckland should handle its investments. Moves already made include taking cash out of Irish bank accounts after recent uncertainty over banks there.

The council is also to reinforce its policy of putting financial security before liquidity and finally making cash and to only invest in the top rated institutions.

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