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At one stage, the collapse of banks in Iceland was considered to be restricted to those who tried to get rich too quickly in a country that was punching above its weight, and maybe a few savers lured by the high rates of interest.

Now it seems a serious number of councils have put their money Iceland’s way as well, and they stand to lose it all.

On first glance, this seems daft, even if it is with the benefit of hindsight. Anyone with a degree of financial common sense, if not actual technical knowledge, would know that if something looks too good to be true, then it probably is.

Perhaps in this case, questions should have been asked about whether the attractive rates offered were sustainable, or perhaps whether the banks were strong enough to keep offering these products.

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