<P> The FME placed Landsbanki in receivership early on 7 October . A press release from the FME stated that all of Landsbanki's domestic branches, call centres, ATMs and internet operations will be open for business as usual, and that all "domestic deposits" were fully guaranteed . The UK government used the Banking (Special Provisions) Act 2008 first to transfer retail deposits from Heritable Bank to a Treasury holding company, then to sell them to Dutch bank ING Direct for £ 1 million . The same day, the FME placed also Glitnir into receivership . </P> <P> That afternoon, there was a telephone conversation between Icelandic Finance Minister Árni Mathiesen and UK Chancellor of the Exchequer Alistair Darling . That evening, one of the governors of the Central Bank of Iceland, Davíð Oddsson, was interviewed on Icelandic public service broadcaster RÚV and stated that "we (the Icelandic State) do not intend to pay the debts of the banks that have been a little heedless". He compared the government's measures to the U.S. intervention at Washington Mutual, and suggested that foreign creditors would "unfortunately only get 5--10--15% of their claims". </P> <P> Darling announced that he was taking steps to freeze the assets of Landsbanki in the UK . The Landsbanki Freezing Order 2008 was passed at 10 am on 8 October 2008 and came into force ten minutes later . Under the order the UK Treasury froze the assets of Landsbanki within the UK, and introduced provisions to prevent the sale or movement of Landsbanki assets within the UK, even if held by the Central Bank of Iceland or the Government of Iceland . The freezing order took advantage of provisions in sections 4 and 14 and Schedule 3 of the Anti-terrorism, Crime and Security Act 2001, and was made "because the Treasury believed that action to the detriment of the UK's economy (or part of it) had been or was likely to be taken by certain persons who are the government of or resident of a country or territory outside the UK ." </P> <P> The UK Prime Minister, Gordon Brown, announced that the UK government would launch legal action against Iceland over concerns with compensation for the estimated 300,000 UK savers . Geir Haarde said at a press conference on the following day that the Icelandic government was outraged that the UK government applied provisions of anti-terrorism legislation to it in a move they dubbed an "unfriendly act". The Chancellor of the Exchequer also said that the UK government would foot the entire bill to compensate UK retail depositors, estimated at £ 4 billion . It is reported that more than £ 4 billion in Icelandic assets in the UK have been frozen by the UK government . The UK Financial Services Authority (FSA) also declared Kaupthing Singer & Friedlander, the UK subsidiary of Kaupthing Bank, in default on its obligations, sold Kaupthing Edge, its Internet bank, to ING Direct, and put Kaupthing Singer & Friedlander into administration . Over £ 2.5 billion of deposits for 160,000 customers were sold to ING Direct . The scale of the run on Kaupthing Edge deposits had been such that many transactions were not completed until 17 October . Although Geir Haarde has described the UK government's actions over Kaupthing Singer & Friedlander as an "abuse of power" and "unprecedented", they were the third such actions taken under the Banking (Special Provisions) Act 2008 in less than ten days, after interventions in Bradford & Bingley and Heritable Bank . </P>

Iceland's role in the global financial crisis