SFO goes to Iceland to investigate banking collapse

According to Financial Adviser's sister paper, the Financial Times, Richard Alderman, director of the SFO, is set to hold talks in London with Eva Joly, the French anti-corruption expert has been hired to assist the Icelandic investigation.

It is understood the talks have been arranged following the recent questioning of the lending practices at the Icelandic banks.

When the banks collapsed in October last year it affected more than 200,000 UK consumers who had savings in about 300,000 accounts with Icesave UK, the retail deposit business of the UK branch of Landsbanki.

According to the FT, the SFO has been gathering intelligence on the banks for months, with the meeting following a leaked report which highlighted unusual lending patterns at Kaupthing Bank, which was one of the three Icelandic banks to collapse.

The news came as Iceland's government said it was close to announcing plans to repay the €4bn (£3.4bn) lost by British and Dutch savers.

Under the proposed legislation, Iceland would pay £2.3bn (€2.7bn) to the UK and €1.2bn (£1bn) to the Netherlands in a 15-year period, with an initial grace period of seven years.

Earlier this month Financial Services Compensation Scheme confirmed banks, building societies and credit unions learnt would be asked to pay £406m as their initial contribution to the costs of bank defaults in last year.

The levy is used to make compensation payments following the failures of banks including Landsbanki and Kaupthing Singer and Friedlander.

Zac Ghadially, associate financial adviser of London-based IFA Yellowtail Financial Planning, said: "The Serious Fraud Office does not have a great track record of doing anything so I am not sure what it will achieve in this investigation."