Here is Simon Watkins writing on thisismoney.co.uk on 16 March 2008:
An interesting question to ask is whether councils would ever have made such risky investments if they had not been under pressure from the Audit Commission to maximise returns.
But the real horrors are in Iceland.
Credit insurance for debts at Iceland's biggest bank, Landsbanki, is priced at 610 points while that for Kaupthing is priced at a hair-raising 856. Given that these two have taken billions in UK retail deposits, it may be a sobering thought for savers to consider where they are putting their cash. These banks are now seen as the most unsafe in the developed world.
Of course, no one can be sure that disaster looms for anyone, but the figures on credit default swaps show clearly where investment professionals think the big risks are.
You have been warned.