A LIST of banks and building societies which Burnley council will invest in following the loss of a £1million deposit in Iceland has been dramatically slimmed down.

Town hall finance bosses have hired specialist consultants to examine their investment portfolio, after the authority was hit by the Landsbanki crash last year.

Following a review, by Sector Treasury Services, Irish banks will no longer be a home for Burnley deposits.

This rules out Ulster Bank Ireland and Anglo Irish Bancorp – but Ulster Bank’s main Belfast operation is still an approved partner.

The advice of Sector is to pick institutions with higher credit ratings, as opposed to asset values.

Resources head Phil Moore says in a report to councillors: “This list is regularly reviewed and has been the subject of external assessment by treasury management experts in the past.

“Despite this the risks involved were highlighted last year when the council failed to receive a £1million deposit due to be returned in October 2008, due to the failure of Landsbanki.”

Efforts are still being made to recoup the loss from the Icelandic bank, which was once on the approved list of investment partners.

Only £2million will be invested with most financial institutions, although £5m is the maximum for HSBC.

The maximum term for deposits ranges from one month, for the Coventry Building Society, three months for Northern Rock and six or 12 months for the majority of banks.