Britain has fended off the threat of a politically charged London lawsuit over its use of anti-terror powers to freeze billions of an Icelandic bank’s assets. Reykjavik conceded Tuesday that a High Court challenge to the freezing order made against Landsbanki in October stood scant success. But it said it would back a separate legal challenge brought against London related to Kaupthing, one of three Icelandic banks nationalised last year to stave off collapse. Iceland’s decision to refrain from action in London over Landsbanki suggests that Britain’s unprecedented use of the freezing powers in a non-terror case could be hard to challenge domestically, potentially clearing the way for similar action by the Treasury against other failing financial institutions.

This entry was posted by Gwen Robinson on Wednesday, January 7th, 2009 at 5:31 and is filed under Capital markets. Tagged with iceland, kaupthing, landsbanki. Edit this entry.