Posts Tagged ‘Banking Crisis’
Friday, December 4th, 2009
The journalists’ associations of Norway, Finland, Sweden and Denmark released a joint statement this week saying they have strong reservations about developments in the Icelandic media since the banking crisis, especially the hiring of David Oddsson as editor of daily newspaper Morgunbladid.
The joint statement says that many experienced Icelandic journalists have been laid off without due notice and that these developments present a real danger to journalistic freedom in the country. They say Icelandic media should have more freedom and impartial leadership to adequately cover the country’s economic situation.
The Nordic associations question the logic of hiring the former Prime Minister and central bank head at the time of the crash, at a time when he himself is a focus of media attention.
The fact that the current chairman and vice chairman of the Icelandic Journalists’ Association have both recently been made redundant from their journalistic positions is also cited as cause for concern in the joint statement. The Scandinavian journalists’ associations closed their statement with an invitation to their Icelandic peer association to hold a conference in Iceland to discuss the state of Nordic journalism generally and to jointly address the issues raised.
Tags: Banking Crisis, Crash, David Oddsson, Denmark, Economic Situation, Finland, Focus, Former Prime Minister, Invitation, Journalism, Journalistic Freedom, Journalists Association, Leadership, Logic, Media Attention, Norway, Sweden, Vice Chairman
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Wednesday, November 25th, 2009
(UPDADTED 26 November) The office of Iceland’s Special Prosecutor into the banking crisis yesterday carried out searches at the headquarters of Byr savings bank and MP Bank.
The issue concerns the purchase, by a holding company called Exeter, of shares in Byr at a time in autumn 2008 when share dealing in Icelandic banks was officially suspended.
Exeter is accused of purchasing the shares from MP Bank and certain employees of Byr – funded by a special unsecured loan from Byr itself.
Yesterday’s searches went ahead with permission from the Reykjavik District Court. The searches involved most of the Special Prosecutor’s 22 staff as well as specialist police officers, and took all day.
RUV sources revealed as early as this April that a company called Arkea took a billion kronur loan from Byr in October and December 2008 which it then transferred to daughter company Exeter Holdings and used to buy Byr shares from MP Bank. Three Byr staff members at the time told RUV that Exeter was actually owned by MP Bank.
The FME, Iceland’s financial regulator, had been investigating the case before recently transferring it on to the Special Prosecutor.
UPDATE: Ragnar Z: Gudjonsson, head of Byr, has left his post. He says he did this to make life easier for the savings bank and its staff, but that he has never broken the law in the course of his work. He says he is confident investigations will prove this.
Tags: Autumn, Banking Crisis, Banks, Buy Shares, Byr, Daughter Company, Exeter, Financial Regulator, Holding Company, Investigations, Kronur, Mp, Police Officers, Ragnar, Reykjavik, Share Dealing, Special Prosecutor, Specialist Police, Staff Members, Unsecured Loan
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Wednesday, November 18th, 2009
The office of Iceland’s special prosecutor into the banking crisis has for the first time used its powers to freeze personal assets.
Stod 2 News reported last night that the office of Olafur Thor Hauksson has ordered the immediate freezing of Baldur Gudlaugsson’s accounts. Gudlaugsson is the former permanent secretary at the Ministry for Finance who sold his shares in Landsbanki immediately before the bank’s collapse. Stod 2 reported that the amount frozen is equivalent to the amount the shares’ sale generated.
When interviewed by Stod 2, Olafur Thor Hauksson would not confirm how much money has been frozen or whose money it is. He said those details will be made public as soon as the issue has gone to court.
Tags: Baldur, Banking Crisis, Collapse, Finance, How Much Money, Iceland, Landsbanki, Permanent Secretary, Personal Assets, Shares, Special Prosecutor, Thor
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Thursday, November 12th, 2009
The basic salary of a Reykjavik city councillor with the addition of various extras can be close to ISK 1 million a month (USD 8,020 at today’s rate but closer to 12,000 before the banking crisis) a month. In addition, the city pays each and every council member ISK 300,000 per year for phone bills. The mayor earns around ISK 1.1 million per month, including extras.
The basic monthly salary of a councillor is ISK 404,000 with an extra 100,000 for sitting on the Executive Board.
The chairman of the Executive Board and the President of the council both get extra, RUV reports.
The mayor, Hanna Birna Kristjansdottir is the city councillor with the most impressive paycheque. Her basic salary is ISK 900,000, with an additional 70,000 for newspapers, restaurant bills and travel.
She receives a further ISK 100,000 as the chairman of the capital region’s fire brigade and 70,000 as the chairman of the Civil Protection Agency. In addition to this, she has unrestricted mobile phone usage and the use of a car and chauffeur.
Tags: 1 Million, Banking Crisis, Chauffeur, City Councillor, City Councillors, Council Member, Fire Brigade, Mayor Hanna, Mobile Phone Usage, Newspapers, Phone Bills, Restaurant Bills, Reykjavik City, Salary
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Monday, November 2nd, 2009
It now seems extremely likely that New Kaupthing will take a 40 percent share in Hagar, the company behind Iceland’s biggest supermarkets and fashion retailers, and that Jon Asgeir Johannesson and other investors will be allowed to keep 60 percent by investing ISK 7 billion. The action will free Hagar’s current mother company from debt and remove it entirely from the picture. Foreign creditors will most likely bear the brunt of the ensuing multi-billion krona losses.
Hagar, which runs shops including Bonus, Hagkaup and 10-11, is one of the companies owned by the holdings company 1998. 1998 is owned by Jon Asgeir Johannesson and family. In 2006, the company took a roughly EUR 260 million loan from Kaupthing to buy Hagar from Baugur. At today’s exchange rate, the euro debt is around ISK 48 billion, Visir.is reports. The debt of 1998 was transferred over to New Kaupthing after the banking crisis because it is an Icelandic company with mainly domestic operations.
A management reorganisation is taking place at Hagar, including the parachuting in of two Kaupthing employees to 1998’s board.
Due to massive debts owed to the bank, it now looks likely that New Kaupthing will take a 40 percent stake in Hagar and a contract is apparently being written up that would confirm the change of ownership, as well as totally removing 1998 from the picture.
New Kaupthing is, for the time being, still a nationalised bank.
Tags: Banking Crisis, Baugur, Brunt, Change Of Ownership, Creditors, Domestic Operations, Euro Debt, Exchange Rate, Fashion Retailers, Hagkaup, Johannesson, Krona, Massive Debts, Mother Company, Nationalised Bank, Percent Stake, Reorganisation, Retail Empire, S Board, Supermarkets
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Thursday, October 29th, 2009
British newspaper The Financial Times is running an article about Olafur Thor Hauksson, Iceland’s Special Prosecutor investigating the banking crisis. In the article Eva Joly, the famous fraud investigator and Hauksson’s key international adviser, complimented him as “very hard working and very honest”.
Joly illustrates her point by saying that despite working in Reykjavik and living in Akranes and despite occasional weather that can seriously inhibit driving, Hauksson has never been away from the office for more than half a day.
The article also quotes Joly as saying the investigations will take around five years to complete, Visir.is reports.
The FT article states that some doubt Hauksson’s ability to successfully lead the investigation – pointing to the fact that his previous experience is only as police chief in a town of 6,500 people.
Hauksson is interviewed in the article; undisturbed by the pressure, he feels he has grown well into his new job and asks people simply for patience. He says he and his staff have been working hard to first fully see the big picture before zooming in closely.
The original FT article can be read here.
Tags: Adviser, Akranes, Article States, Banking Crisis, Big Picture, Crash Investigator, Doubt, Eva Joly, Financial Times, Fraud Investigator, Half A Day, Investigations, New Job, Patience, Police Chief, Quotes, Reykjavik, Special Prosecutor, Thor, Weather
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Thursday, October 29th, 2009
Despite the current restriction in Iceland’s state budget, individual MPs are still distributing funds to their constituencies for concerts and sports clubs. Since the banking collapse, MPs have allocated around ISK 80 million from their budgets in this way, as was revealed in current affairs programme Kastljos last night.
Individual funds for MPs have been a part of the national budget for many years and are intended to cover unexpected costs. Since 2000, MPs have distributed some ISK 800 million for a wide variety of projects.
The television show looked particularly at funding grants given by Minister for Fisheries and Agriculture, Jon Bjarnason and Communications Minister Kristjan Moller. An example used was Bjarnason’s ISK 500,000 cash injection to Holar University, where he was once Rector.
Since the banking crisis began, Kristjan Moller has granted ISK 4.6 million in funding – of which half has gone to his own constituency, Northeast Iceland. The money in the Northeast was partly spent on a choir concert, a ISK 200,000 grant for the priest in Siglufjordur to complete his Master’s thesis, and funding for Siglufjordur Elementary School to take part in the national schools’ sport and fitness championships.
In the five months Arni Mathiesen was Minister for Finance following the banking collapse, nearly all of his funding was spent in his South Iceland constituency.
Kastljos also reported that neither of the two unelected government ministers (Minister for Industry, Energy and Tourism Katrin Juliusdottir and Minister for Economic Affairs Gylfi Magnussson) has yet used any of their funding allowances at all.
Tags: Banking Crisis, Choir Concert, Constituencies, Constituency, Current Affairs, Economic Affairs, Fisheries, Fitness Championships, Five Months, Government Ministers, Kristjan, Mathiesen, Moller, Mps, National Budget, South Iceland, Sports Clubs, State Budget, Television Show, Unexpected Costs
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Sunday, September 6th, 2009
While the banking crisis blew the world’s economic system to pieces last year, financial regulators from the Isle of Man were talking to their counterparts at the Financial Services Authority in Canary Wharf.
Of uppermost concern was the future of troubled Icelandic bank, Kaupthing. Iceland’s own financial crisis was about to claim its most high-profile victim. And the bank’s Isle of Man division had assets worth an estimated £900m. Should Kaupthing’s Isle of Man branch funnel its cash back to Iceland, or take it to what it assumed to be a safer haven, its London outpost? What the FSA advised is not clear, but what is indisputable is that the island approved the release of £532m of the assets to the London arm.
While the banking crisis blew the world’s economic system to pieces last year, financial regulators from the Isle of Man were talking to their counterparts at the Financial Services Authority in Canary Wharf.
Of uppermost concern was the future of troubled Icelandic bank, Kaupthing. Iceland’s own financial crisis was about to claim its most high-profile victim. And the bank’s Isle of Man division had assets worth an estimated £900m. Should Kaupthing’s Isle of Man branch funnel its cash back to Iceland, or take it to what it assumed to be a safer haven, its London outpost? What the FSA advised is not clear, but what is indisputable is that the island approved the release of £532m of the assets to the London arm.
From the Observer
Tags: Assets, Banking Crisis, Canary Wharf, Counterparts, Economic System, Financial Crisis, Financial Regulators, Financial Services Authority, Fsa, High Profile, Hurricanes, Isle Of Man, London Observer, London Outpost, Safer Haven, Tax Havens
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Monday, August 17th, 2009
Rowena Mason at the Telegraph is one of few foreign journalists at a major paper that have realized the scale and implications of the Icelandic economic meltdown;
But Dr Jon Danielsson, an Icelander who teaches economics at the London School of Economics, believes that while the timing of the crash was dictated by the global banking crisis, the scandal is unique among European financial institutions.
He believes the root of Iceland’s problems that have now decimated its economy appear to have started when the government decided to privatise the banks in the early 1990s.
“Iceland got its regulations from the EU, which was basically sound,” he says. “But the government had no understanding of the dangers of banks or how to supervise them. They got into the hands of people who took risks to the highest possible degree.”
From the Telegraph
Tags: Banking Crisis, Banks, Crash, Dr Jon, Early 1990s, Economic Meltdown, Economy, Exposed, Financial Institutions, Global Banking, Iceland, Journalists, London School Of Economics, Mason, People, Scandal, School Of Economics, Telegraph, Ugly
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Monday, August 17th, 2009
All foreign ambassadors in Iceland will be informed in detail about the current state of the Icesave bill today. European Union representatives in Brussels will be updated with the same information at the same time.
Icelandic Foreign Minister, Ossur Skarphedinsson, said yesterday that the government has been in regular contact with the British and Dutch authorities this weekend and has been updating them both on the changes being made to the bill and the progress of the negotiations on a daily basis since Friday. “We have gone over the issues in close detail with them and they have been provided with a very clear translation of the new bill,” he said to mbl.is. He added that the British and Dutch have also been informed that the bill still has its second and third debates in parliament to go and that its progress is therefore now in the hands of parliament.
The bill could see further changes as it goes through parliament, according to Skarphedinsson, but he added that the two governments have also been informed of that.
The Foreign Minister said that it is important to keep the European Union updated on the issue as well, and especially the French and the Germans, who will all be updated today. The minister would not be drawn on the initial British and Dutch reaction to the new bill, saying that their attitudes could yet change the further they study the issue. He added that he is personally confident that the changes made still fit within the frame of the original agreement, but that there is no way of being sure what the final outcome will be yet.
Steingrimur J. Sigfusson, Minister of Finance stressed that the British and Dutch authorities will continue to be regularly briefed. “I hope that they will understand,” he said. The minister also said in an unrelated speech yesterday that those responsible for the banking crisis should come out publicly and apologise for what they have done to the Icelandic nation, according to RUV.
Gudbjartur Hannesson, the Social Democrat MP who heads the parliamentary finance committee, said that there is still plenty of work to do.
Tags: Attitudes, Banking Crisis, Brussels, Current State, Daily Basis, Debates, Dutch Authorities, European Union, Foreign Ambassadors, Foreign Minister, Germans, Governments, Iceland, Minister Of Finance, Negotiations, Ossur, Parliament, Translation, Union Representatives
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Friday, August 14th, 2009
Icelandic Prime Minister Johanna Sigurdardottir took the unusual step of writing an opinion piece for the Financial Times which went on the paper’s website yesterday evening. In her article “Icelanders are angry but will make sacrifices”, the PM lays out her version of why the Icesave deal is potentially unfair on Icelanders.
“Icelanders, who do not feel responsible for the global banking crisis, are willing to make sacrifices to secure normal relations and trade with the world. But they are angry at having to take on the burden of compensation for the Icesave savings accounts of Landsbanki – a failed, privately owned, commercial bank, which attracted hundreds of thousands of UK and Dutch savers with high interest rates. The amount to be shouldered by Iceland is huge – about 50 per cent of our gross domestic product. Assets against this debt will substantially lower the net amount, but there is much uncertainty about the valuations and forecasts underpinning such calculations.
“Last October, when Iceland was in deep crisis, UK authorities froze the assets of Landsbanki, and placed the bank (and for a while Iceland’s government) alongside terrorist organisations on the official UK Treasury list of entities subject to asset freezing. Kaupthing Bank, which had just been granted a government loan amounting to 5 per cent of GDP, then collapsed after its subsidiary in London was seized by the Financial Services Authority. Despite a critical report in April by the House of Commons Treasury Select Committee, no satisfactory explanations have been given for the UK’s actions,” Sigurdardottir writes.
In the course of the rest of her article, she argues that he EU depositor protection scheme which Iceland adhered to in its handling of Icesave is flawed: “The EU deposit insurance directive that places this burden upon us is seen by some as aimed at the failure of individual banks rather than a systemic collapse, as was the case in Iceland.”
Johanna Sigurdardottir reiterates her government’s desire to pass the contract and normalise international relations, but to also not be left with an unrealistic or unfair debt burden.
The article is available in full on ft.com, but only to registered users. It is, however, free to register.
Tags: Banking Crisis, Critical Report, Deposit Insurance, Financial Times, Global Banking, Government Loan, Gross Domestic Product, High Interest Rates, House Of Commons, Icesave, Johanna, Misgivings, Protection Scheme, Sacrifices, Terrorist Organisations, Treasury Select Committee, Uk Authorities, Uk Treasury, Valuations, Yesterday Evening
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Tuesday, July 14th, 2009
The people of Iceland are being punished for the misbehavior of the countries financial elite
This might come as an surprise to some, Iceland had its share of financial elites, I say had because they are all gone now. Most of them are running away as fast as they can, trying to move all valuables to tax-havens before the government puts a freeze on there assets. Yes, the government of Iceland has yet to freeze any assets since the banking crisis hit almost 10 months ago.
The world never stops to let me down, everything is falling apart, there is no trust left anywhere. Even the Social Democrats who came into power only a few months ago, when Iceland elected its first pure left government, have done nothing but let us down. From a fresh breeze to a rotten old smell of disgusting politics, only a few days are needed to turn a group of decent parliamentarians into pale blood sucking pack of scumbags.
Last summer, If anyone had asked my if Iceland needed help I would have laughed in their face. Help? We don’t need anyone, we have everything right here and more. The investigations into the collapse is going slowly, but these things are complicated, that’s why we have imported help from Norway in the form of Eva Joly. Right now, that’s all the hope I have left in the system, it has come down to a single person almost. If Eva Joly can’t get those bankers, no one can.
We can’t wait for the EU membership, that thing takes years, and why should Iceland join the EU anyway? The other Scandinavian countries have turned there back on us. No help from there, unless we agree to pay billions for the Icesave accounts. Its a fact, the regular Joe’s of Iceland had no clue how the Icelandic banks could offer better interest rates then Deutsche bank. We can’t pay anyway, its just too much for tiny Iceland. The Icelandic Economic Miracle was all a big shame, we know that now, sorry. Please don’t let us pay for the sins of a handful of bankers. They had us for fools.
- Andri Sigurðsson
Tags: 10 Months, Banking Crisis, Billions, Clue, Collapse, Deutsche Bank, Economic Miracle, Elites, Financial Elite, Fools, Fresh Breeze, Government Of Iceland, Handful, Icesave, Misbehavior, Parliamentarians, People Of Iceland, Scandinavian Countries, Tax Havens, Valuables
Posted in Iceland, Market, News, Politics | No Comments »
Tuesday, June 30th, 2009
The Nordic ministers of justice met in Iceland yesterday to discuss their co-operation on tackling organised crime and child pornography on the internet. The Icelandic Ministry of Justice’s tactics with regard to the banking crisis were also discussed at the meeting. Iceland’s chief special state investigator, Olafur Thor Hauksson introduced his work to the ministers at the meeting which took place at Hotel Ranga.
According to the Ministry of Justice website the meeting ministers decided, among other things, to concentrate on investigating economic crimes in the Nordic Countries and work on ways of increasing co-operation on issues relating to cross-border crimes. Recommendations from the meeting will be sent to each minister.
The meeting was also attended by Halldor Asgrimsson on behalf of the Nordic Council of Ministers in Copenhagen. Asgrimsson is a former Icelandic Prime Minister and Foreign Minister.
Tags: Banking Crisis, Child Pornography, Copenhagen, Council Of Ministers, Economic Crimes, Foreign Minister, Halldor Asgrimsson, Iceland, Justice Ministers, Justice Website, Met, Ministry Of Justice, Nordic Council, Nordic Countries, Nordic Ministers, Prime Minister, Regard, State Investigator, Thor
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Monday, June 15th, 2009
All five Nordic prime ministers are meeting in Egilsstadir, East Iceland today and yesterday to discuss a variety of issues concerning Nordic life and politics.
“This is a very useful meeting where we are putting emphasis on Nordic co-operation and European co-operation during difficult economic times; we have spent a lot of time talking about the recession,” Icelandic Prime Minister Johanna Sigurdardottir said at a press conference.
Sigurdardottir said that the Nordic countries have joined hands in re-examining financial rules to try and ensure that the mistakes which brought around the current financial crisis cannot be repeated.
She added that the leaders have decided at the meeting to finalise the Nordic loans to Iceland because of the country’s banking crisis. There are only some formalities remaining which need to be addressed in the respective countries’ governments, mbl.is reports.
(Photo: miguelb/http://www.flickr.com/photos/mig/189810278/)
Tags: Banking Crisis, East Iceland, Economic Times, European Co, Financial Crisis, Formalities, Governments, Johanna, Loans, Nordic Countries, Photo, Photos, Politics, Prime Minister, Prime Ministers, Recession
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Wednesday, May 27th, 2009
The global economic downturn has brought international attention to Iceland like it has never experienced before; but a new study has shown that its reputation as a travel destination only continues to get better, despite some of the bad press.
The survey was carried out during February on respondents from the countries: Denmark, Germany and the UK. It asked them about their opinions of Iceland as a travel destination. The results show that interest in visiting the country has actually increased since the global banking crisis hit last autumn. The survey focused on respondents’ impressions of the destination and not on the fact that visiting Iceland now costs less than in previous years.
The outcome of the research was presented at a conference in Reykjavik last week given by the Trade Council of Iceland, the Public Relations Society of Iceland and the Iceland Tourist board, among others.
Iceland’s image hasn’t been hurt by the economic difficulties because, as the old saying goes, any publicity is good publicity. Despite the negative content of a lot of the news, Iceland is very topical at the moment – an opportunity the country needs to seize and direct to its own advantage, Eye for Image’s David Hoskin said.
Icelandair, the biggest airline in Iceland, is busy using the new publicity advertising Iceland as a tourist destination, with good results.
Bookings with Icelandair so far this year, and on into the summer high season, are much better than expected already. Tourists are being attracted to Iceland not only by the stunning scenery, the world-class angling, the elves and the puffins: it goes almost without saying that the weakness of the Icelandic krona is also a major reason to visit Iceland at the moment.
The biggest impression 55 percent of the Britons surveyed thought of Iceland was its fabulous nature. Many in the UK leg of the survey also characterised the Icelandic people as charming and kind.
German respondents largely seemed to agree as well, declaring the Icelanders to be comfortable and hospitable to be around. Respondents in Germany also associate Iceland with beautiful houses and a good standard of living.
Denmark, on the other hand, regards Iceland as a small country which ‘knows how to get by’.
For more information on travel to Iceland, go to www.icelandair.com
(Advertisement)
Tags: Banking Crisis, Britons, Destination Image, Economic Difficulties, Economic Downturn, Fabulous Nature, Global Banking, Hoskin, Icelandair, Icelandic Krona, International Attention, Last Autumn, Negative Content, Puffins, Reykjavik, S David, Stunning Scenery, Tourist Destination, Travel Destination, Uk Leg
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Monday, May 11th, 2009
Icelandair, Iceland’s biggest airline is beating the global travel slump, opening new routes, upgrading its service and shifting its sales focus to optimise potential in difficult times. As a result the airline emerged as Icelandair Group’s star company in the quarterly report to investors, which was unveiled on Friday.
Icelandair has been exploiting a range of opportunities in order to maintain its strong market position in a time when all airlines are struggling. Icelandair Group, Icelandair’s parent company, released its first-quarter report on Friday which showed a smaller loss than predicted in the always-difficult first three months of the year. Icelandair and Travel Service were credited with the Group’s best performances.
Investors were pleased to learn from Icelandair Group’s first quarter report 2009 that Icelandair’s EBITDA (Earnings before Interest, Taxes, Depreciation and Amortisation) were the highest in the first quarter since the company’s establishment in its current form in 2001.
Icelandair CEO Birkir Holm Gudnason says that the company’s ability to instantly shift sales focus from the Icelandic market to overseas helped to offset a serious drop in Icelandic passengers travelling overseas following the banking crisis. Tourists have been encouraged to visit Iceland by the favourable Icelandic krona exchange rate.
The number of foreign visitors to Iceland using Icelandair increased by 11 percent in the first quarter and now account for over half the airline’s passengers for the first time ever.
Icelandair’s fearless route planning is also helping, with Seattle flights via Iceland coming on stream in July. The new route is in response to SAS’s withdrawal from the route.
Icelandair will be the only airline linking Scandinavia with the west coast USA as of July. The airline is confident to make the move because its efficient, low-cost aircraft make operating the route easier for Icelandair than some of its competitors. Also, with the stopover in Iceland, planes from Seattle will not rely solely on Scandinavia-bound passengers, but also tourists to Iceland.
Because of Iceland’s strategic location, Seattle to Europe flight distances are almost the same as for direct flights.
2009 is going to be tough for airlines, but Icelandair is pleased with spring and summer demand so far, optimistic about its new routes and seems well-placed to make the most of the global economic recovery the moment it arrives.
More details on Icelandair, including Friday’s first-quarter investors’ report, can be found at http://www.icelandairgroup.com/investor-relations/news/
(Icelandair press release)
Tags: Banking Crisis, Depreciation, Difficult Times, Ebitda, First Three Months, Global Travel, Holm, Icelandair, Icelandic Krona, Krona Exchange Rate, Market Position, Months Of The Year, Quarter Report, Quarterly Report, Route Planning, Slump, Star Company, Strong Market, Travel Service, West Coast Usa
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Monday, April 13th, 2009
PRESS RELEASE FROM THE ICELANDIC GOVERNMENT:
The Icelandic government welcomes the Treasury Committee report and consideres it to be a meaningful contribution to the explanation of the events in October.
Jóhanna Sigurðardóttir, the Prime Minister of Iceland, has written to Gordon Brown the Prime Minister of the UK, asking for his reactions to findings in the Treasury Commmittee report on the actions taken by the UK government early October when the Icelandic banks collapsed. The Freezing Order, issued by the UK government on 8 October 2008 on the authority of the UK Anti-Terrorism, Crime and Security Act 2001, freezes certain funds relating to Landsbanki, including those owned, held or controlled by the Icelandic Government and authorities. Later the UK authorities effectively took over Kaupthing Singer&Friedlander, a subsidiary of Kaupthing, put the bank into administration and transferred most of its retail deposits to the Dutch bank, ING.
The House of Commons Treasury Committee published its first report on the banking crisis on April 4th. The report: Banking Crisis: The impact of the failure of the Icelandic banks - Treasury Contents, notes that the use of the Anti-Terrorism, Crime and Security Act 2001 was too strong an instrument to use against Iceland and the Icelandic banks at the beginning of the banking crisis. Furthermore, the report goes on to critcise the behaviour of the Chancellor of the Exchequer in relation to Iceland.
The report states: ,,The use of the Anti-Terrorism, Crime and Security Act 2001 had considerable implications for the Icelandic authorities in maintaining a functioning financial system. We call on the Treasury to consider how appropriate the use of this legislation would be in any similar circumstances in the future. The use of this Act inevitably stigmatises those subject to it and a less blunt instrument would be more appropriate.”
The committee also examined the conversation between the two finance ministers, Mr. Mathiesen of Iceland and Mr. Darling of the UK, and said it had found no evidence to back Mr. Darling’s allegations that his Icelandic counterpart had said that the Icelandic government would not honour its obligations and therefore it would be necessary to apply the Security Act against Icelandic interests.
The Icelandic government has welcomed the report and considered it to be a meaningful contribution to the explanation of the events in October. According to Mr. S.J.Sigfússon, minister of finance, addressing the Icelandic Parliament, Althingi, the report would possibly make it less difficult to get the now state-run bank Landsbanki removed from the HM Treasury’s list of regimes subjected to financial sanction by the British government, which also includes Al-Qaida, the Taliban and North Korea.
The committee also notes that there migth be flaws in European banking law, referring to issues surrounding the cross-border regulation of financial institutions. The report says: ,,Our Banking Crisis inquiry, and specifically the problem of the failure of the Icelandic banks, has raised issues surrounding the cross-border regulation of financial institutions. Considerable taxpayer support has been required to provide rapid compensation to onshore UK depositors in Icelandic banks that ‘passported’ into the UK. This area of European law requires further consideration, and we will return to this topic in our future inquiry onto the banking crisis within its international context, with specific reference to the regulation of subsidiaries and branches of cross-border financial institutions.”
Tags: Act 2001, Amp, Banking Crisis, Blunt Instrument, Chancellor Of The Exchequer, Committe Report, Committee Report, Dutch Bank Ing, Freezing Order, Gordon Brown, House Of Commons, Meaningful Contribution, Prime Minister Of Iceland, Report States, Security Act, Treasury Committee, Treasury Notes, Uk Authorities, Uk Government, Uk Treasury
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Wednesday, April 8th, 2009
Jóhanna Sigurðardóttir, the Prime Minister of Iceland, has written to Gordon Brown the Prime Minister of the UK, asking for his reactions to findings in the Treasury Commmittee report on the actions taken by the UK government early October when the Icelandic banks collapsed.
Tags: Banking Crisis, Banks, Committe Report, Gordon Brown, Prime Minister Of Iceland, Uk Government, Uk Treasury
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Monday, April 6th, 2009
The Treasury Committee of the UK Parliament released its first report in a series on the banking crisis on Saturday, analyzing the collapse of the Icelandic banks in October 2008. It criticizes the demeanor of Chancellor of the Exchequer Alistair Darling.
Tags: Alistair Darling, Banking Crisis, Banks, Chancellor Of The Exchequer, Collapse, Demeanor, Iceland, Parliament, Treasury Committee, Uk Parliament, Uk Treasury
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