Treasury has used its powers under the Banking (Special Provisions) Act to protect depositors in two UK operations of Landsbanki - its subsidiary Heritable Bank plc and its branch IceSave. It made an emergency order on 7 October to transfer certain rights and liabilities of Heritable (specifically its retail deposit book) to a new company, wholly owned by Treasury. It also makes provision for the bank being declared in default by FSA and going into administration, which subsequently happened. In expectation that Landsbanki would be unable to meet its liabilities, it made an order to freeze the bank’s assets and FSA declared IceSave in default. Treasury is concerned UK depositors will not get the same treatment as Icelandic ones in the event of Landsbanki’s failure and is working with Icelandic regulators to address this. FSA says no retail depositor will lose money. It then repeated its actions in respect of Heritable for Kaupthing Singer & Friedlander (KSF), another UK subsidiary of an Icelandic bank, which FSA also declared in default. ING Direct has now bought the retail deposit business of Heritable (from the Treasury company) and some retail deposit business from KSF. For further information please see our newsflash.