The key is in the word "deposits", though

The Icelandish scheme, to put the assets and the domestic deposits in the new bank and leave all foreign deposits with the empty husk of the old, was fraudulent.

In this case the issue hinges on the different between a branch of a foreign bank, and a subsidiary bank of a foreign entity. Subsidiary banks are regulated by the host country and covered by its deposit guarantee, as they are incorporated in the host country. Branches need not be regulated or insured by the host country. In the case of Icesave, the controversy is around whether it was covered by a UK deposit insurance scheme called "passport" which allowed branches of foreign banks to buy into British deposit insurance for a fee.

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman