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    Gary, they did not take risks, as such, that is the point.

    They did the sensible thing and diversified their investments around a large number of institutions. The money that was lost was just a very tiny proportion of the total. All invested in a low risk manner and even the Icelandic Banks were A rated at the time of the investment, by no means risky.

    I must point out that there is no such thing as a totally risk free investment, there are only different kinds of risks.

    I should also point out that DDC Icelandic investment was a 12 month fixed interest rate (a good rate) and the banking crisis erupted 11 months into that term.

    The October 2008 crisis was a once in a lifetime situation.

    Because they had sensibly diversified their investments to a wide range of institutions they had managed and reduced the overall investment risk of the portfolio.

    Paul - you are correct, the Audit Commission themselves did indeed have money with Icelandic Banks. They are the watchdog who would have critisised DDC either for taking too much risk or, on the other hand, not properly managing the portfolio for the best returns within a clearly defined risk profile. There is always a balance to take.

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