Posts Tagged ‘Banking Crisis’
Monday, May 10th, 2010
Further arrests of former Kaupthing bosses by Iceland’s Special Prosecutor into the banking collapse are considered likely in the near future.
Former Kaupthing CEO, Hreidar Mar Sigurdsson and Kaupthing Luxembour boss, Magnus Gudmundsson are both now sitting in the Litla Hraun prison awaiting trial. The Special Prosecutor’s investigation has uncovered regular serious criminal activity within the bank by senior figures in the lead up to the banking crisis.
Investigations into Kaupthing began shortly after the bank was taken over by the government in autumn 2008 and the Special Prosecutor has ordered several raids and searches over the last year in connection with the case. Among the things being investigated was the allegation of Kaupthing owners’ engaging in illegal market manipulation to support the bank’s share price.
Kaupthing loaned many billions of kronur to holding companies which then used the money to buy Kaupthing shares or bonds issued by the bank, Visir.is reported.
The so-called Al-Thani issue falls into this category. Kaupthing loaned Sheik Mohammed Bin Khalifa Al Thani ISK 25 billion in the summer of 2008 and the Sheik then bought a five percent stake in the bank. The shady deal is described as a show-trade and came shortly after Kaupthing bosses met to discuss the importance of getting new foreign investment.
Suspicious transfers of money from Kaupthing in Iceland to foreign accounts shortly before the bank’s demise are also a key element of the Special Prosecutor’s investigation. Little or no explanation for the transfers has been found so far. Undisclosed sources put the figure transferred overseas, mostly to Luxembourg, at around ISK 100 billion (USD 786.5 million at today’s exchange rate). Part of this sum is probably connected to the previously mentioned loans to buy shares.
Still more investigations into Kaupthing are in progress at the FME national financial regulator and have not been handed over to the Special Prosecutor yet. The Luxembourg-based Kaupthing daughter company, Black Sunshine is the subject of one such investigation.
Tags: Al Thani, Allegation, Banking Crisis, Collapse, Demise, Financial Regulator, Foreign Investment, Gudmundsson, Illegal Market, Isk, Khalifa, Kronur, Magnus, Market Manipulation, Shady Deal, Share Price, Sheik Mohammed, Special Prosecutor, Undisclosed Sources, Visir
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Thursday, May 6th, 2010
The former President of Kaupthing Bank, Hreidar Mar Sigurdsson has been arrested in Reykjavik, accused of criminal malpractice.
Police arrested Sigurdsson on the orders of Iceland’s Special Prosecutor into the banking crisis, Olafur Thor Hauksson. Hauksson and his team continue to work closely with international white-collar crime investigator, Eva Joly.
The Special Prosecutor put in a request for two weeks’ police custody to the Reykjavik District Court today, but the judge decided to adjourn the case for a day. This means that Hreidar Mar Sigurdsson will stay in police cells until tomorrow at the earliest, and possibly longer if he does not receive bail, Visir.is reports. If convicted, he faces up to eight years in jail.
The Special Prosecutor and his team have been investigating alleged ‘institutionalised market abuse’ within Kaupthing; and the investigation even included raids in Luxembourg.
According to RUV, Sigurdsson was arrested on charges of filing/documentation infractions (IS: skjalabrot), embezzlement, breaking laws on bond trading, and for breaking the laws governing limited companies.
Hreidar Mar was the President of Kaupthing Bank for many years following its privatisation and also had the dubious honour of being Icelandic ‘Tax King’ (Tax records in Iceland are made public for a short period each year, and it is assumed that the highest tax payers – or Tax Kings – are also the highest earners).
Tags: Banking Crisis, Bond Trading, Crime Investigator, Dubious Honour, Earners, Embezzlement, Eva Joly, Former President, Infractions, Kaupthing Bank, Limited Companies, Market Abuse, Police Cells, Police Custody, Privatisation, Reykjavik, Special Prosecutor, Tax Payers, Visir, White Collar Crime
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Saturday, May 1st, 2010
The biggest change in support in this weeks Iceland Gallup poll is for the Independence Party; but leader Bjarni Benediktsson told reporters he was not surprised. The recent banking crisis report had a foreseeable effect, he said, and it will take time to win people’s trust again.
After increasing in popularity in every opinion poll since the autumn, the Independence Party have now dropped six points to 28 percent – the same as the Left Greens who add four percent.
The Social Democrats are up two percent on 23 percent support and the Progressive party add a point and are on 14 percent.
There have been calls for fresh elections in some quarters and Bjarni Benediktsson says he would welcome such a move despite the slump in Independence Party support: his is still the biggest party in Iceland.
There has been prominent discussion of the support given from Icelandic banks and companies to politicians in the run up to the banking collapse but Benediktsson reiterated that
all his MPs are working hard to be totally transparent, to regain public trust and to maintain the good name of their party.
Tags: Autumn, Banking Crisis, Biggest Party, Bjarni, Collapse, Crash Report, Crisis Report, Democrats, Gallup Poll, Greens, Independence Party, Mps, Opinion Poll, Politicians, Popularity, Progressive Party, Public Trust, Quarters, Six Points, Slump
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Wednesday, April 14th, 2010
Oh Icelanders, is there anything you can’t make avant-garde? The Times’ Robert Mackey explains :A Fresh from presenting two plays inspired by the epic collapse of the countrya s banks, actors at the Reykjavik City Theatre are in the middle of an ambitious, if not particularly dramatic, effort to read the entire text of a new 2,250-page report on …
Tags: Actors, Avant Garde, Banking Crisis, Banks, Collapse, Epic, Performance Art, Reykjavik City, Robert Mackey, Two Plays
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Wednesday, April 14th, 2010
Iceland’s so-called Black Report into the banking crisis was discussed all day yesterday in parliament and heated exchanges will continue today.
The deputy chair of the parliamentary budgetary committee was one of several MPs to harshly speak out against the president for his role in the collapse.
All of parliament seems to be united in support for the report and respect for its authority – but their interpretations of it are split largely along party lines.
Among the final speakers last night was deputy chair of the parliamentary budgetary committee, Bjorn Valur Gislason, who harshly criticised President Olafur Ragnar Grimsson and his staff. He said that Grimsson had conscientiously extolled the virtues of the “Outvasion Vikings” who in turn became like old family friends at Bessasstadir, the presidential residence.
The previous government of Geir H. Haarde also came in for criticism. The report says that important decisions were often badly informed. Ministers did not give essential information to Althingi, often because they did not have it themselves. One conclusion drawn was that key figures within government simply did not trust one another.
Current Prime Minister, Johanna Sigurdardottir told Althingi yesterday that much of the information in the report is a harsh indictment on the authorities.
Three parliamentary committees have been tasked with examining the report closely and recommending improvements to the political structure. At least one of the committees is expected to hand its findings over within three weeks.
Tags: Banking Crisis, Collapse, Deputy Chair, Fallout, Family Friends, Geir, Gislason, Important Decisions, Indictment, Johanna, Mps, Olafur Ragnar Grimsson, Parliament, Parliamentary Committees, Political Structure, Prime Minister, Ragnar, Vikings, Virtues, Yesterday In Parliament
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Monday, April 12th, 2010
The investigative committee of Iceland’s Althingi parliament has sent many cases on to the state prosecutor. Many of those are already under investigation. These include allegations that the banks’ annual reports were deliberately distorted, loans to connected parties were abnormal and that stock market investment funds were operating outside the law. There is also reason to believe that bank staff are guilty of market manipulation.
The investigation committee was obliged to inform the state prosecutor of any issues it felt constituted illegal activity – committee members handed over their findings to the prosecutor yesterday. The state prosecutor’s job is to establish which cases require full investigation and then send them on to Olafur Thor Hauksson, the Special Prosecutor hired specifically to deal with the banking crisis. Hauksson and his team are already aware of many of the issues raised in the Althingi report, State Prosecutor Bjorn L. Bergsson told RUV. He added that the Special Prosecutor will be glad of the report for the new information it contains.
Among the more worrying findings of the report is that all three of the banks held much more that 10 percent of their own shares – the legal maximum. In September 2008, Kaupthing held 42 percent of its own shares and its London branch appears to have been operating outside the control of both Kaupthing’s internal and external auditors.
Bergsson said that the report brings to light several important issues which need urgent investigative action and added that statements will follow to outline those investigations within weeks.
Tags: Allegations, Althingi, Annual Reports, Bank Staff, Banking Crisis, Collapse, Committee Members, External Auditors, Illegal Activity, Investigation Committee, Investigative Action, Investigative Committee, Investment Funds, Kaupthing, London Branch, Market Manipulation, Special Prosecutor, State Prosecutor, Stock Market Investment, Thor
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Monday, April 12th, 2010
Before the end of March 2008, the Central Bank of Iceland reached an loan agreement with the Bank for International Settlements (BIS) in Basel. The lending line was for USD 500 million. But the Icelandic central bank lost the funding because its staff forgot to extend the agreement – which they had to do by the end of April the same year.
Efforts were apparently made to allow an extension to the time limit at the last moment, but the BIS would not be swayed. The new parliamentary report into the banking crisis claims that this was a key mistake from the central bank at a time when few things were more important that building up Iceland’s foreign currency reserves.
Tags: April, Bank For International Settlements, Bank Loan, Bank Of Iceland, Banking Crisis, Basel, Central Bank Of Iceland, Currency Reserves, Foreign Currency, Last Moment, Loan Agreement, Lost, Mistake, Parliamentary Report, Time Limit
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Monday, April 12th, 2010
The new Althingi banking crisis report states that on 4th July 2008 a meeting was held between members of the Icelandic central bank and the Prime and Finance Ministries.
Central bank minutes from the meeting say that David Oddsson, the then-head of the central bank, had been given the strong impression from the European Central Bank and the central banks in the Nordic countries that they would be happy to let the Icelandic commercial banks fail rather than risk their needing to draw on European depositor guarantee funds.
Tags: 4th July, Althingi, Banking Crisis, Central Banks, Commercial Banks, Crisis Report, David Oddsson, European Central Bank, Finance Ministries, Members, Nordic Countries, Report States, Risk
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Friday, April 9th, 2010
David Oddsson, Iceland’s former Prime Minister and central bank manager and current joint editor of Morgunbladid newspaper, will be overseas when the Althingi report into the banking crisis is released on Monday.
According to Visir.is, it is not known where he has gone or for how long, but it has apparently been confirmed that he will not be in Iceland when the so-called black report is released.
As Oddsson was in charge of the Central Bank of Iceland when the banking collapse occurred, it is almost certain the report will look closely at him and his work.
As such a key character in this soon-to-break news, Oddsson’s departure from Iceland could be due to a desire not to be in charge at Morgunbladid on days when the news is going to be about him personally.
Tags: Ahead, Bank Crisis, Bank Of Iceland, Banking Crisis, Central Bank Of Iceland, Collapse, Crisis Report, Current, David Oddsson, Desire, Former Prime Minister, Leaves, Morgunbladid, Visir
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Tuesday, April 6th, 2010
Olafur Thor Hauksson, Iceland’s Special Prosecutor looking into the banking crisis, believes his team will complete its first investigations before the end of the month.
Hauksson said when the first stage is completed decisions can then be made about prosecutions. He said that the different issues being investigated are all at different stages and would not be drawn on which cases have come the farthest.
“We are set to close some cases this month, but that is only very provisional,” Hauksson told Visir.is. He added that all too often, prosecutors are at the end of a case and then suddenly find they need more time. But the information available today suggests that the end of April is a fair target, Hauksson says.
Tags: Banking Crisis, Decisions, Different Stages, Finish Line, Iceland, Investigations, Prosecutions, Prosecutors, Special Prosecutor, Target, Thor
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Friday, March 26th, 2010
“The pain has been incredible. The government sold the banks to people with no banking experience and questionable management experience. To be honest I think it will take
more than five years to get out of this financial hole, unless we strike oil. Our credibility has been completely shattered.”
Related posts:
- The Worst Banking Crisis Of Any Country In 80 Years
- Reykjavik Energy Believes ISK Will Weaken More In Seven Years
- Euromoney In 2002: Questions over Landsbanki’s new shareholder
Tags: Banking Crisis, Banks, Credibility, Financial Hole, Management Experience, More Than Five Years, Reykjavik Energy, Seven Years, Shareholder
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Monday, March 15th, 2010
The long-awaited report by the Icelandic parliament’s financial investigation committee is currently being printed. According to RUV sources, the report is being printed at Oddi press in Reykjavik where Securitas guards are keeping it under constant watch.
The investigation committee has made significant effort to ensure none of the details of their report are leaked before the official release date. Originally the report was due last November. It was however delayed until the 1st February, and then until 1st March and then until “two or three weeks into March”. This schedule stands today and looks set to be achievable subject to the print run going to plan.
Tags: 1st February, Awaited Report, Banking Crisis, Crisis Report, Financial Investigation, Iceland, Investigation Committee, Last November, Parliament, Release Date, Reykjavik
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Saturday, February 20th, 2010
Future of Hope is a new feature length documentary about some of the good things that are happening in post banking crisis Iceland.
The film is in post production and its producers are hoping to release it on schedule in May this year…subject to the final funding being put in place.
In an effort to get the cash flowing, the producer and director (who are both British) have launched Future of Hope on the Kickstarter website and hope to raise USD 10,000 in 40 days. A tall order indeed.
They remain optimistic however, having secured ten percent of that amount in the first few days.
The film’s tagline is: “Hope is not a dream, but a way of making dreams a reality” and its promotional material describes is as:
“Focusing on the positive and inspirational things to come out of Iceland since the economic crash and intends to improve the reputation and image of Iceland on a global scale and also give hope to many Icelanders faced with an uncertain future.
“Representing Iceland as a fantastic place to invest in, live in and visit; ‘Future of Hope’ explores inspirational characters growing organically and promoting more self-sufficiency and less environmentally damaging imports of fresh produce, pioneers and world leaders in new renewable energy sources and those looking to re-invent Iceland as a means to promote positive change and show the rest of the world what can be achieved from the embers of a huge economic crash. From the greatest disasters comes the most inspiring change.”
Search for Future of Hope on Facebook to see trailers or to join its fan group.
Tags: Banking Crisis, Economic Crash, Embers, Facebook, Fan Group, Fantastic Place, Feature Length Documentary, First Few Days, Fresh Produce, Global Scale, Greatest Disasters, Inspirational Things, New Feature, New Film, Promotional Material, Renewable Energy Sources, Self Sufficiency, Tagline, Uncertain Future, World Leaders
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Thursday, February 18th, 2010
Iceland’s parliamentary banking collapse investigators have decided to allow those accused of wrongdoing more time to respond.
The committee members sent out letters warning 12 public figures that they will be mentioned in the so called ‘black report’ into the banking crisis, due for release within weeks. The 12 were given a limited amount of time to reply; but have now been granted an extension until the 24th February. Only public officials have the legal right to reply to the committee’s accusations, so it is only those 12 people who have been pre-warned by the committee.
The twelve public officials include former Prime Minister and Central Bank of Iceland head, David Oddsson; former Prime Minister, Geir H. Haarde; former Minister for Trade, Bjorgvin Sigurdsson; former Foreign Minister Ingibjorg Solrun Gisladottir and former Finance Minister, Arni Mathiesen.
Visir.is reports that a statement from the committee says that the extension was offered to all 12 as a matter of fairness, but that submissions may be made before the deadline. In light of the two delays already to the report’s publication, the statement says the committee still hopes to publish its report at the beginning of March.
Tags: Accusations, Amount Of Time, Bank Of Iceland, Banking Crisis, Central Bank Of Iceland, Collapse, Committee Members, Crash, David Oddsson, Fairness, Finance Minister, Foreign Minister, Former Prime Minister, Investigators, Limited, Public Officials, Submissions, Visir, Wrongdoing
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Friday, January 29th, 2010
THE PRESIDENT of Iceland Olafur Ragnar Grimsson has said that a joke linking his country’s economic difficulties with those of Ireland, which circulated in financial circles in London at the height of the banking crisis, was “just a recent example” of the “arrogance of the British”. The joke – “What’s the difference between Iceland and Ireland? One …
Tags: Arrogance, Banking Crisis, Economic Difficulties, Financial Circles, Ireland, Joke, London, Olafur Ragnar Grimsson, President Of Iceland, Ragnar
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Tuesday, January 26th, 2010
Pall Hreinsson, chairman of the parliamentary investigation committee set up to investigate Iceland’s banking crisis, says he and his colleagues are very frustrated that their anticipated report has had to be delayed for a second time.
The Althingi report was set to come out on the 1st February, with expectations running high that it would be a major step towards working out what happened and, potentially, punishing those at fault. The committee now aims to finish its work before the end of February.
The report was originally supposed to be released on 1st November 2009; but was delayed until 1st February, and now once more, Visir.is reports.
Hreinsson explained that the committee’s work is taking longer than expected because they have been investigating more issues than initially expected. The parliamentary investigators have formally interviewed 150 people and held talks with nearly 300 people overall.
Committee member Tryggvi Gunnarsson told Visir that there is much more to the story than the leaders of Glitnir simply walking into the Central Bank of Iceland one day and declaring their bank was in trouble. The Committee needs to tease out all the details behind the story for parliament and the public, he said. Committee members believe no bigger investigation into a banking crisis has ever been carried out.
Gunnarsson added that the companies whose names appear most often in the story so far are mostly all already gone, or on their way out – bankrupt, in other words.
Tags: 1st February, 1st November, Bank Of Iceland, Banking Crisis, Central Bank Of Iceland, Colleagues, Committee Member, Committee Members, Glitnir, Investigation Committee, Investigators, Parliament, Second Time, Visir
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Monday, January 11th, 2010
Eva Joly, adviser to Iceland’s special prosecutor into the banking crisis, said on Icelandic television yesterday that the tide of international public opinion regarding Icesave seems to be swinging in Iceland’s favour.
She said the sensible thing for the Icelandic government to do next would be to engage a third party to help draft an entirely new Icesave agreement which is fair on all involved. She recommended Germany, France and Spain as possible neutral third parties.
Iceland’s finance minister, Steingrimur J. Sigfusson said in a separate interview later on that the idea is not being dismissed out of hand; but that the Netherlands and the UK would have to agree to it first and formal discussions would need to take place to discuss the idea of third-party renegotiation.
Tags: Adviser, Banking Crisis, Eva Joly, Favour, Finance Minister, Formal Discussions, Germany France, Iceland, Icesave, Mediator, Netherlands, Public Opinion, Renegotiation, Spain, Special Prosecutor, Swinging, Television, Third Parties, Third Party, Tide
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Monday, December 14th, 2009
Britain’s Serious Fraud Office will formally begin its investigation into the operations of the failed Icelandic banks Glitnir, Kaupthing and Landsbanki in the United Kingdom.
The investigation will especially focus on loans which several known individuals received from the banks, sources for The Observer within the SFO claim.
Initial investigations have been underway since February into financial crimes and market abuses allegedly carried out by the banks, and the SFO has been collecting reams of information on the operations of the Icelandic banks in Britain. Information has come, among other sources, through its dealings with Eva Joly, adviser to Iceland’s Special Prosecutor for the banking crisis and through co-operation with Icelandic investigators, MBL.is reports.
Meanwhile, The Sunday Telegraph reported that the SFO is to begin a formal investigation specifically into Kaupthing after four months of information gathering. The paper also reports that the former Kaupthing board has hired the services of the respected solicitor Ian Burton from Burton Copeland to look out for their interests with regard to the investigation.
Tags: Adviser, Banking Crisis, Banks, Burton, Copeland, Eva Joly, Financial Crimes, Formal Investigation, Four Months, Initial Investigations, Investigators, Kaupthing, Landsbanki, Market Abuses, Reams, Regard, Serious Fraud Office, Solicitor, Special Prosecutor, Sunday Telegraph
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Saturday, December 12th, 2009
Iceland’s National Audit Office sent out a statement yesterday saying that questions surrounding the Central Bank of Iceland’s lending to financial institutions last year remain unanswered and should be directed to the Althingi Parliamentary Investigation Committee.
The statement focuses on the Central Bank’s losses due to collateral loans granted to financial companies in 2008. At the end of 2008, the Bank’s liabilities due to such loans amounted to ISK 345 billion (USD 2.7 billion at today’s rate). The bank lost ISK 75 billion outright and the government took responsibility for the other ISK 270 billion.
In the months leading up to the banking crisis, the three largest banks, which would soon collapse, secured loans from smaller financial companies, which then secured loans from the Central Bank against the uninsured shares. In August 2008, the Central Bank tightened its rules on collateral insurance, thereby pushing the banks towards trying this method of acquiring capital. According to the National Audit office, it should be asked why the Central Bank was not alarmed at this practice which ended up significantly worsening its, and the entire nation’s, financial position.
The report calls for Althingi to find out the answer to the above question, while stressing that it is a general point of interest and that no finger of blame is being pointed at this stage.
Tags: Althingi, Bank Of Iceland, Banking Crisis, Banks, Central Bank Of Iceland, Collateral Loans, Financial Institutions, Financial Position, Insurance, Investigation Committee, Lending Institutions, Liabilities, Losses, Lost, National Audit Office, Point Of Interest
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