We are supporting talks between the Local Government Association and the government on local authority investments in Icelandic banks.
We have investments of £5m with Landsbanki Islands hf and £4m with Heritable Bank Limited as part of an overall investment portfolio of over £80m.
These were made at a time when both banks were assessed as having good credit ratings.
Our investments in the Icelandic banks are scheduled to be repaid to us in instalments over the coming months up to May of next year.
What this means in practice is that by carefully re-phasing our cash flow we will be able to manage any shortfall arising from the banks' failure to repay the loans in the immediate term.
By doing this we will ensure that our current services are maintained and that we will be able to pay our staff.
We have followed best practice in financial management, adhering closely to Chartered Institute of Public Finance and Accountants (CIPFA) and Department of Communities and Local Government (DCLG) guidelines when making decisions about investments.
These guidelines underpin our treasury management strategy, annual investment strategy and medium term strategy.
These council strategies set out our objective of achieving the optimum return on investments commensurate with proper levels of security and liquidity.
They set a limit for the council of investing up to £6m with any single named institution.
They also set the criteria to ensure the institutions the council invests with are highly credit rated.
Landsbanki Islands hf and Heritable Bank are separately recognised in the Financial Services Authority's (FSA) list of banks. They are also separately credit rated.
The council continually monitors the credit ratings published by independent credit agencies to ensure that it is investing in approved institutions.
Both Landsbanki Islands hf and Heritable Bank were removed from our approved lending list on 1 October 2008 when those banks' ratings were downgraded.
As part of our prudent approach to financial management we have consistently sought to ensure we have invested in a diverse range of institutions to spread risk and minimise, as far as possible, the impact of problems in the financial markets.