Iceland wins major case over bank

Andrew Higgins / New York Times News Service /

BRUSSELS — Iceland on Monday won a landmark case at a European court, ending an acrimonious legacy from the collapse of its banking system more than four years ago.

The court upheld the country’s refusal to promptly cover the losses of British and Dutch depositors who had put more than $10 billion in Icesave, the bankrupt online offshoot of a failed Icelandic bank.

In a judgment issued in Luxembourg, the court of the European Free Trade Association, or EFTA, cleared Iceland of complaints that it violated rules governing the protection of depositors drawn up by the European Union. While Iceland is not a member of the Union, it is bound by most of its rules as a member of EFTA.

The case has attracted widespread attention because it touches on issues of cross-border banking that have been at the center of the European Union’s efforts to ensure the future stability of the region’s financial system.