Washington Post/Bloomberg

Iceland Bank Collapse Nears End as Creditors Reach Last Accord

Posted 18/12/2015 - 17:44 by Anonymous

2015-12-18 (All day)

A seven-year standoff between Iceland and the international creditors of its failed banks is nearing and end after a court approved the last remaining settlement.

The agreement signed by the caretakers of LBI hf paves the way for creditor payments from the bank’s 455.6 billion kronur ($3.5 billion) estate. It follows similar deals involving Glitnir Bank hf and Kaupthing Bank hf. The three banks hold combined assets of $17.6 billion, according to their latest financial statements.
Glitnir’s administrators said they planned to make the first payments to creditors on Friday. Theodor S. Sigurbergsson, a member of Kaupthing’s winding up committee, said in an interview this week that he expects "to start payments to creditors early next year." ...

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Iceland Bank Creditors Strike Deal to Sidestep Capital Controls

Posted 28/10/2015 - 20:30 by Anonymous

2015-10-28 (All day)

Iceland’s Finance Minister Bjarni Benediktsson and the island’s central bank approved proposals from creditors of Kaupthing Bank hf, Glitnir Bank hf and LBI hf that will allow them to sidestep capital controls and avoid a 39 percent tax on all their assets.

The banks’ winding up committees now need to take the accord back to the creditors for approval. The individual composition agreements will then need to be ratified by the court in Reykjavik, Benediktsson told reporters on Wednesday. It’s the "largest economic operation we’ve ever undertaken," he said.

The agreement will need court approval by March 15. Iceland imposed capital controls after its three biggest banks defaulted on a combined $85 billion in October 2008. The collapse forced the north Atlantic island to seek a $4.6 billion emergency package that was led by the International Monetary Fund.

According to central bank Governor Mar Gudmundsson, the deal fulfills Iceland’s condition of not jeopardizing monetary policy, the exchange rate, or financial stability. The krona has gained about 8 percent against the euro in the past year as the central bank has raised rates to guide the economy through the challenges it faces.

Once this stage of the bank creditor settlement is finished, the country can move to the next phase, which is to lift capital controls on the rest of the population and corporations, he said.

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Creditors in Iceland’s Failed Banks Prepare to Fight Exit Tax

Posted 21/11/2014 - 08:49 by Anonymous

2014-11-21 (All day)

Creditors in Iceland’s failed banks say they are ready to fight plans to impose an exit tax after a local newspaper run by a former central banker suggested the levy may be as high as 35 percent.

“We can see no lawful basis for such a tax, so we don’t consider this to be a realistic idea,” Steinunn Gudbjartsdottir, a member of Glitnir Bank hf’s winding-up committee, said in an interview. “If something like this were to be imposed, it would amount to confiscation, nothing more.”


Gudbjartsdottir’s counterpart at Kaupthing’s winding up committee, Johannes Runar Johannsson, says it’s also unwilling to accept the 35 percent tax rate reported by Morgunbladid. The newspaper, whose editor-in-chief David Oddsson is Gudmundsson’s predecessor at the central bank, didn’t reveal how it obtained its information.

‘Thin Line’

“There’s a thin line between justifiable taxation and expropriation of assets,” Johannsson said in an interview. “A 35 percent exit tax is much closer to an expropriation of assets than a lawful taxation.”

“If this is one of the ideas which are on the table, then there doesn’t appear to be a will to reach a consensual solution,” said Gudbjartsdottir. “If that’s the case, then this matter will have to be dealt with before the courts. That would mean that an end isn’t in sight in the near term.”

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Hedge Funds Face Exit Tax as Iceland Central Bank Mulls Plan

Posted 20/11/2014 - 16:56 by Anonymous

2014-11-20 (All day)

Hedge funds and other creditors with claims against Iceland’s failed banks face an exit tax as the island looks for ways to unwind capital controls without hurting the economy. The government targets having a plan it can present by year-end that would map out how Iceland will scale back currency controls currently blocking about $6.6 billion from exiting the island. The framework will build on analysis conducted by the central bank and advisers, including JPMorgan Chase & Co.

“Some sort of exit tax in some form will be some part of the removal of capital controls,” central bank Governor Mar Gudmundsson said yesterday in an interview in Reykjavik. “How large, and what role or what percentage, isn’t timely to discuss.”

Newspaper Morgunbladid, whose editor-in-chief is Gudmundsson predecessors, David Oddsson, reported this week that a tax for investors trying to leave Iceland may be set at 35 percent. It didn’t say how it got the information and Gudmundsson declined to confirm the figure.

An exit tax at that level would be fought by the administrators of the failed banks, according to Johannes Runar Johannsson, a member of Kaupthing Bank hf’s winding-up committee. ...

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