General Discussions

  • ng
  • 11/10/08 31/12/20
  • a depositor
  • Offline
Posted: Fri, 10/10/2008 - 05:39

Any general chat about what is going on that doesn't fall into any other categories.

IMPORTANT: How to post links to related News on other sites

As of 21/Oct/08 we have a searchable news archive. Site editors (and anybody else who wants to help) now have the mammoth task of find and re-posting all relevant links that were posted in forums and re-posting as a news item into the archive.

It would be appreciated if you didn't make the task even bigger than it currently is.

Please post news items using the Create new News item link near top of right side-bar.

4.833335
Your rating: None Average: 4.8 (6 votes)

Comment viewing options
Select your preferred way to display the comments and click "Save settings" to activate your changes.

Former Kaupthing Chief Executive arrested

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Thu, 06/05/2010 - 20:57

From Times Online
May 7, 2010
Former Kaupthing chief arrested in Iceland

Icelandic authorities arrested Hreidar Mar Sigurdsson, the former chief executive of the collapsed bank Kaupthing today, making him the first high profile banker to be detained in the wake of the Nordic country’s financial crisis.

The special prosecutor who is investigating the Icelandic banking crash of October 2008 said that Hreidar Mar Sigurdsson is suspected of falsifying documents and breaking laws on stock trading for personal gain.

Mr Sigurdsson is being held in police custody until a bail hearing tomorrow at the Reykjavik District Court.

Prosecutor Olafur Thor Hauksson said that he planned to ask that the former banker be kept in custody for two weeks to prevent the possibility of him tampering with evidence or interfering with the investigation.

Mr Hauksson was appointed by the Iceland’s post-crisis government to investigate whether there was any criminal activity in the lead up to the banking crash that crippled Iceland’s economy, sending its currency into a tailspin, frightening off foreign investors and forcing out the country’s former leaders.

Britain’s Serious Fraud Office is still conducting its own investigation into suspected fraud at Kaupthing, with a focus on efforts by the bank to attract British investors to its “high yield” deposit account, Kaupthing Edge.

About 30,000 British individuals, companies and organisations made an investment.

When it opened the investigation in December, the British agency said that it would work with the Icelandic special prosecutor because it also looked closely at a series of decisions that appear to have allowed substantial value to be extracted from the bank in the weeks and days before its collapse.

The demise of Kaupthing, one of several Icelandic banks to collapse, sparked a political row between Reyjkavik and London because it failed after the British Government invoked anti-terrorist legislation to freeze the UK assets of another collapsed Icelandic bank, Landsbanki.

Britain’s Treasury said that the move was necessary to ensure the money that British savers had placed in the bank would not be whisked back to Iceland.

But Iceland’s prime minister at the time, Geir Haarde, criticised the move as an “unfriendly act” and blamed the decision for inspiring panic that led to the subsequent collapse of Kaupthing.

A cross-party committee of British lawmakers was later critical of London’s handling of the situation, saying that the government’s statements on the ability and willingness of Reykjavik to compensate non-Icelandic account holders was “ultimately unhelpful.”

See also BBC report
http://news.bbc.co.uk/1/hi/world/europe/8665880.stm


@expat - wondered when this would happen

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Thu, 06/05/2010 - 23:51

Well the net is tightening and starting to catch the "big fish" as well as a few "tiddlers". As well-known fisher folk, these Icelandic souls must be used to this! I'm glad to see the prosecutor is preventing Mr Sigurdsson from leaving custody to prevent falsifying evidence. The mere suggestion that he might says something about what the prosecutor has found or allegedly suspects. Well his assets may be locked or hidden away but they should be up for grabs.

I note, in the Times article, that the British Serious Fraud Office is conducting an investigation , of its own, into suspected fraud at Kaupthing, with a focus on efforts by the bank to attract British investors to its "high yield" Kaupthing Edge. Once again, I see no mention of its interests of British investors in KSFIOM. Is HMG doing what it is supposed to do and "parentally" reperesent the interests concerning the Isle of Man? When you think of the supposed investment of the Middle East sheik, that was supposed to give a shiny, safe and secure image of KSFIOM, this was a similar "attraction" for British investors - individuals, local governmental bodies, charities, etc. Seems like that was just an illusion to attract further investment and a good Moody rating. This was also a falsehood, put out and sanctioned by KSFIOM which should also be investigated by the SFO and taken up by HMG ( whoever they are next!)

Without prejudice.


To Expat

  • Gordon 45
  • 22/10/08 n/a (free)
  • a depositor
  • Offline
  • Thu, 06/05/2010 - 22:06

Hi there Expat,

Brilliant news re our 'friend' Hreidar Mar Sigurdsson, the former chief executive of the collapsed bank Kaupthing in Iceland. May be this is the start of a 'big snowball' that engulfs many of these people who have helped rob us of our savings. and just maybe it might lead to some form of repayments to us from somewhere.

Thanks again for the info,

Gordon 45


Hi Glen and Gordon Yes it's a

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Fri, 07/05/2010 - 12:26

Hi Glen and Gordon
Yes it's a start isn't it, it was always going to take a lot of time for any investigation to come up with anything, but this is a reasonable start. Yes I hope it is the beginning of a snowball effect, and preferably one that sees our assets returned!

This is what some of us have spent a long year pushing for, accountability, it's all about evidence and proof isn't it. I hope we can push the UK to an Inquiry, but that still seems a way off to me, a lot would need to change to see that happen I suspect.

On the matter of the SFO investigation I have had a dream, as somebody once said, that the Shiekh and the share ramping will finally be exposed. I have a "bee in my bonnet" about that, as it's the issue that made me think it was safe in KSF! This case of alleged market manipulation revolves around the sale of a 5pc stake in Kaupthing to a company called QFinance linked to a Qatari investor. Several weeks before the bank collapsed, a press release said the sale showed that "Kaupthing's position is strong and we believe in the bank's strategy and management". Only after the bank failed did it emerge that the Qatari investor "bought" the stake using a loan from Kaupthing itself and a holding company associated with one of its employees.

Investigators are also looking at a seemingly similar purchase of a 2.5pc stake in Kaupthing by London-based property entrepreneurs Moises and Mendi Gertner.

Time will tell, we need an enquiry to show how pernicious HMG has been in this, the representation of the IoM in negotiations is a matter that HM Gov want to sweep under the carpet it seems. How far any SFO investigation spreads is of course supposition at the moment, but I am bound to say that the more the evidence comes out, the guiltier HMG look for their part in this, and the worse the Icelandic Government and Central Bank under Oddsson look.

It also seems to me that the UK did a fair job directing depositors anger at the IoM and deflecting it from their own duplicitous actions. I think Ice put that to HMT rather well. Not that I am absolving the FSC and KSF IoM management of their responsibilities, because I'll stick to my point that they were ameteurish, naive and irresponsible to say the least. Criminal? I doubt it, but I'll wait and see.

Still we have to have victims and blame don't we!

Patience and keep on writing and exposing the situation is what is needed. Lets hope this a turning point, but as I always say, I won't hold my breath!!!!


Re:Our friends PWC. Have I just spotted a link?

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
  • Offline
  • Thu, 06/05/2010 - 23:11

http://business.timesonline.co.uk/tol/business/industry_sectors/support_...

It seems that the PWC offices in Iceland were raided by the authorities a short while ago.
Now who is doing 'our liquidation? Could it be PWC?

Now I know just how happy everyone is with dear old MiKe Simmons (and his UK minders of course).
And of course Mike Simmons seems to be enamoured of Señor Dogherty (Why hasn't he sacked him or at least renegotiated his contract?)).

Just a thought. Now if you knew that your associates in Iceland.. or their associates.. had been auditing the banks with whom you needed to talk to 'seriously'. And if you knew they were rather closely linked to the branch of PWC (big (4..ooh that's past) 3), to say nothing of the UK!, and you were basically disinterested (self-interested), and knew that the UK hierarchy were watching closely, and the IoMG wanted everything swept under the carpet, well just how hard would you work? Just how honest would you be? Might you sort of chortle with embarrassment when members of DAG were asking you serious questions about the situation (ref Frog's public conversations with MS)? I remember MS cort of chortling under his breath.

Now I wouldn't be suggesting that the auditors/liquidators had any secondary interests at all. Far be that from from me. Whoa! Exxon springs to mind... forget it.. just an anomaly.

Hi PWC. Just a personal opinion, but I think you might have well been rather cavalier with the oversight of your franchises. And I think that you ought take remediative measures, and that doesn't mean putting more effort into disguising the truth, that means making some effort to compensate the victims of your, let's say, probable failings.

Even if the readers don't know what I'm talking about I'm sure PWC do.
How much do you charge an hour PWC? But you know possession in 9/10ths of the law.

Kiss.


@Arny - Telegraph article re Commons support Landbanski

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Thu, 29/04/2010 - 06:46

http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/75683...

Commons report supports Landsbanki savers

Savers with Landsbanki Guernsey who lost money during the Icelandic banking crisis have welcomed a report from a Commons committee which criticised the UK government's handling of the situation.

By Leah Hyslop
Published: 9:44AM BST 23 Apr 2010

Comments 25 | Comment on this article
Depositors with Landsbanki Guernsey may never fully recover their savings
Depositors with Landsbanki Guernsey may never fully recover their savings Photo: Rex Features

The Justice Committee’s report on the relationship between the UK, Guernsey and the Isle of Man highlighted the role played by the UK Treasury in representing the interests of the crown dependencies during its negotiations with Icelandic authorities during the crisis, and concluded that the UK had failed to look after the interests of Guernsey adequately.

Landsbanki Guernsey’s parent company went into administration in 2008, and Guernsey’s savers were amongst the worst hit of the crisis.

Related Articles

*
  Pre-Budget report: The Chancellor's speech in full
*
  Letters reveal UK's battles with Iceland over bank crisis
*
  Isle of Man retains its position in offshore elite
*
  Iceland close to £3.3bn UK loan for Icesave compensation
*
  Tories demand Iceland probe
*
  Iceland: what ugly secrets are waiting to be exposed in the meltdown?

As Guernsey did not operate a deposit protection scheme, savers were not covered by the UK government’s bail out, and many lost access to their entire life savings. The bank’s administrators currently estimate that depositors may be repaid only up to 91 percent of their savings.

The report criticised the UK specifically for a delay in sending a letter to request that Icelandic authorities meet Guernsey representatives, which arrived after the Guernsey delegation arrived in Iceland, and recommended that in future “certain officials, either from the UK or from the Islands, be specifically designated as representing the Islands in international negotiations".

Neil Dickens, chairman of Landsbanki Depositors Action Group (LGDAG) said: "We welcome any indication that the UK will make more effort to represent Guernsey's interests, and are pleased to see proof that our interests were not always taken seriously enough. However, in this case it feels a little like shutting the stable door after the horse has bolted."

He added however that the group were equally unhappy with the behaviour of the Guernsey government and Guernsey's supervisory financial authority, the Guernsey Financial Services Commission (GFSC.) "Unlike the Isle of Man's government, which has gone out of its way to help victims of the Icelandic crisis, we feel both Guernsey's government and the GFSC have let us down. They told us that there were parental guarantees in place for Landsbanki, which we have since found out to not be true, and have left us without any clear guidance.

"As far as I am concerned, this makes it the only jurisdiction in the Western world which hasn't helped depositors after a bank collapsed, and we do not understand why we have only received 67 per cent of our money back so far when customers on the UK mainlands have received 100 per cent. Many of us are old, and we may now never see the money that belongs to us."

A spokesman for the government of Guernsey said : "As soon as the Guernsey government was made aware that that the interests of the UK and Guernsey were in conflict, it made its own representation directly to the Icelandic authorities. It has also sought to assist the court-appointed joint administrators in its work to ensure maximum recovery for Landsbanki Guernsey depositors. The Committee's report is supportive of this approach."

Phillip Marr, director of banking for GFSC, said that an independent inquiry into the Landsbanki crisis undertaken by the Promonotory Financial Group "concluded that there was no regulatory failture on the part of the Commission" and that a depositor compensation scheme had since been set up.

Nearly half of Guernsey’s investors with Landsbanki were originally investors with the Guernsey branch of Cheshire Building Society, which was taken over by Landsbanki in August 2006. One third of the savers are expatriates.


Article on our friend Tchenguiz

  • arny
  • 15/10/08 31/05/09
  • unspecified
  • Offline
  • Sun, 18/04/2010 - 11:37

In the Times today.


@arny - article in The Times re Tchenguiz

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Sun, 18/04/2010 - 11:59

ril 18, 2010
Robert Tchenguiz’s Icelandic loans kept banks at bay
Iain Dey

* 2 Comments

Recommend? (1)
Property tycoon Robert Tchenguiz

Property tycoon Robert Tchenguiz

THE property tycoon Robert Tchenguiz received a series of loans from one of Iceland’s failed banks to keep his other lenders at bay, according to a report for the Icelandic government.

Kaupthing, which collapsed in September 2008, lent more than €2.3 billion (£2 billion) to Tchenguiz, who was also one of the bank’s biggest shareholders.

When other banks started to put pressure on him in response to the credit crunch, Kaupthing lent him even more money. A number of “margin calls” — demands made by a bank for additional cash or collateral to support a troubled loan — were met with cash raised from new Kaupthing loans.

Tchenguiz borrowed the additional funds from Kaupthing by pledging his shares in the bank as security.
Related Links

* Legal costs mount in Tchenguiz family row

* Tchenguiz brothers ordered to return files

The claims are detailed in the 2,300-page report published last week by a special commission of the Icelandic parliament into the tiny country’s spectacular financial collapse. The report details how a group of entrepreneurs took control of the country’s banks and used their influence to obtain huge loans.

It also reveals details of the extensive share-propping operations conducted by the banks in the heat of the crisis. About half of the shareholder equity in the Icelandic banking system was owned by the banks themselves through secretive holding companies.

Icelandic regulations restricted the banks from lending more than 25% of their equity to any one individual or related parties. Despite this, Kaupthing’s loans to Tchenguiz amounted to about 60% of the bank’s core equity, the report claims. Similar patterns emerged at the country’s other big banks, Glitnir and Landsbanki.

Glitnir was controlled by Jon Asgeir Johannesson, the entrepreneur behind the Baugur retail group that bought a number of British high street retailers. The report claims he received loans equating to 80% of the bank’s equity. It also alleges that he disguised the extent of his empire by transferring shares in one of his companies to Don McCarthy, former chairman of House of Fraser, and Kevin Stanford, co-founder of the Karen Millen fashion label.

Bjorgolfur Gudmundsson, former chairman of West Ham football club, was the controlling shareholder at Landsbanki. He and his son received loans equating to 140% of the bank’s core equity base.


And to think he believes he's a genuine creditor

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Sun, 18/04/2010 - 12:00

Beggars belief. Robber becomes the robbed.


I went to an Iceland

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Sat, 17/04/2010 - 08:35

I went to an Iceland supermarket this morning, I paid by credit card and the checkout girl asked if I wanted some ashback! Yes I'm regressing fast today!


You should have seen her face....

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Sat, 17/04/2010 - 23:25

You should have asked for umpty-um thousand pounds back just to have seen the look on the shop assistant's face. After all that's what you're owed by the powerful figures, like the owner of the Iceland chain, who raped our deposits, offered by Kaupthing, for their retail developments!!


Special Prosecutor: Many Cases in Final Stages

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Wed, 14/04/2010 - 03:31

http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16539&ew_0...

13/04/2010 | 20:00

Special Prosecutor: Many Cases in Final Stages

Ólafur Thór Hauksson, Special Prosecutor, intends to have completed several of the cases he is currently handling by the end of the month. He says that the majority of the cases that appear in the SIC report are already the subject of his attention.

The SIC report. Photo by Geir Ólafsson.

Processing the cases takes time and a great deal of care. He points out that he is still working in the same legal environment as existed when the collapse happened, ruv.is reports.

Hauksson says that research into the cases that his office is dealing with is at varying stages. Conceivably, some cases could be finished by the end of this month or the beginning of next month.

He says that his office is busy. A team of 25 are working hard to get to the root of these matters. The subject matter is complex and takes a long time [to deal with], and new cases are always being added.

The Director of Public Prosecutions analyses and summarizes which cases should go for further research and directs them to the Office of the Special Prosecutor.

The conclusion of the SIC is basically that the banks were emptied from within by their owners and that much of the responsibility lies with them and the governors of the banks.

Now, a year and a half after the collapse of the Icelandic economy, none of them have been held responsible and some have started new business adventures.

Hauksson understands this criticism but urges great care in his projects, which takes time. Economic crimes are very heavy to research, and demand a lot of staff. Thus the research takes a long time and needs to be done with care.

Despite the crash the legal environment is the same. A certain process is put into motion in conjunction with the research, and this takes time.

Hauksson says he understands the criticisms concerning this, but repeats the importance of meticulous attention in his line of work, which takes time.


Hi Glen07...

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
  • Offline
  • Sun, 18/04/2010 - 06:04

What did Adrian Dogherty know?

The spokesman for the weak directors (were they paid to be silent/ignorant?)

Aiden, (are you there?) I hate you!


Icelands reaction!

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Thu, 15/04/2010 - 08:28

Volcanic ash could ground all air traffic across the UK today, the head of aviation has warned as a mushroom cloud of debris heads south from Iceland towards continental Europe.

Tens of thousands of airline passengers face travel chaos as Heathrow, Gatwick and Stansted cancelled flights and Edinburgh, Glasgow, Aberdeen, Newcastle and Belfast shut because of the eruption in Iceland.

The Met Office has cancelled all flights to and from Scotland because of the dangerous conditions.

Massive visibility problems have caused severe disruption at other airports, including Birmingham, Manchester, Exeter, Cardiff and East Midlands.

A spokesman from Nats said: “The Volcanic Ash Advisory Centre has issued a forecast that the ash cloud from the volcanic eruption in Iceland will track over Europe tonight.

“Nats is working with Eurocontrol and our colleagues in Europe’s other air navigation service providers to take the appropriate action to ensure safety in accordance with international aviation policy.”

The ash cloud is caused by the Eyjafjallajokull volcano, which surged back into life on Tuesday after apparently showing signs of dying down.

It follows eruptions last month in a 1.2 mile wide strip on the flank of the volcano where there is no ice.


Divine retribution

  • fight theft
  • 10/10/08 28/05/13
  • a depositor
  • Offline
  • Fri, 16/04/2010 - 12:43

Just as the report has come out uncovering all the corruption fraud and criminal activity - the timing of the volcanic explosion is like Sodom and Gomorra and the Tower of Babel. Now what retribution can be thrust upon The bank of England FSA and nobody's darling and Gordon Brown too.


Thanks again expat

  • fight theft
  • 10/10/08 28/05/13
  • a depositor
  • Offline
  • Fri, 16/04/2010 - 12:45

For yet more thorough easy to read on the pulse reporting.


Former ministers mentioned in

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Fri, 16/04/2010 - 15:25

Former ministers mentioned in the Special Investigative Commission (SIC) report as being partially responsible for the collapse of Icelandic banks could get up to two years in prison, if found guilty.

The maximum sentence a minister can be charged for violating the code of conduct for office is two years. A parliamentary committee, chaired by Leftist-Green MP Atli Gíslason, is currently measuring whether or not to file charges against the three former ministers implicated in the report: former Prime Minister Geir H. Haarde, former Minister of Foreign Affairs Ingibjörg Sólrún Gísladóttir, and former Minister of Business Björgvin Sigurðsson.

Sigurðsson resigned as Minister of Business shortly after the bank collapse, and resigned again as Social Democrat party manager after the SIC report was released. Haarde has denied any responsibility for his part in the collapse - despite the report's repeated assertions that he was terrified of former Central Bank chairman and current Morgunblaðið editor Davíð Oddsson, and that he purposefully kept Sigurðsson in the dark about the real financial situation in the country - and has said that the banks were the real culprits. Gísladóttir has not yet responded to any attempts from the media for a comment.

Gíslason cautioned for sobriety yesterday in any sort of prosecution of former ministers, saying in part, "One of the things [the committee has] to look at is whether or not ministerial responsibility was involved [in the crash]. This takes us from the traditional role as a parliamentary committee and to an executive power. There we need to tread very carefully, and take in all possible points of view on the matter."

If the committee decides to press charges, it will submit a parliamentary resolution calling for charges to be made.

Vísir reports that the Special Prosecutor has not ruled out filing charges against Oddsson, or against the former chairman of the Financial Supervisory Authority, Jónas Fr. Jónsson.


I rather like this thought!

  • Wanda
  • 12/10/08 31/08/09
  • a depositor
  • Offline
  • Fri, 16/04/2010 - 12:28

"Divine retribution is supernatural punishment of a person, a group of people, or all humanity by a deity in response to something done or said."

My hope is that boiling hot ash has showered down on the sociopaths responsible for marauding around Europe cleaning out the bank accounts of us hard working savers. Now THAT would be divine retribution.


Dont sink yet!

  • bellyup
  • 10/10/08 09/01/10
  • a depositor
  • Offline
  • Fri, 16/04/2010 - 11:20

Is there no end to the trouble caused by this wretched little island?

However i don't want it to sink / blow up just yet!


Gordon Brown admits his

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Wed, 14/04/2010 - 08:00

Gordon Brown admits his mistakes added to financial crisis
By Robert Winnett, Deputy Political Editor
Published: 6:30AM BST 14 Apr 2010

The mea culpa from the Prime Minister comes ahead of the televised debates between the party leaders. In a television interview, the Prime Minister concedes that he bowed to pressure from the City and failed to regulate the banks properly. The crisis has cost taxpayers tens of billions of pounds. RBS and Lloyds Banking Group came close to collapse and Northern Rock and Bradford & Bingley had to be nationalised.

The Prime Minister has steadfastly blamed the crisis on the failure of American regulators and international watchdogs.

Spotlight on the Leaders, to be screened at 7.30pm, he is asked what "mistakes" he has made in office. He replied: "In the 1990s, the banks all came to us and said: 'Look, we don't want to be regulated, we want to be free of regulation.'

"And everybody in the City was saying you know and all the complaints I was getting from people was, 'look, you're regulating them too much.'

"And actually the truth is that, globally and nationally, we should have been regulating them more.

"So I've learnt from that. You don't listen to the industry when they say: 'This is good for us.'

"You've got to talk about the whole public interest. And so we are tougher on the banks and tougher on the way they behave and we can be relied on to make sure the banks act in the national interest so you'll see more measures to do that."

Although Mr Brown has previously admitted "responsibility" for his actions as Chancellor he has declined to admit mistakes made in this country contributed to the crisis.

Only last week, Mr Brown said "the international banks let us down". Last year, he said he was not "sure" Britain's regulatory system could have picked up the problem.

George Osborne, the shadow chancellor, said: "So finally Gordon Brown admits he failed to regulate the bankers and increased taxes on the poor. His next huge mistake would be his jobs tax that will kill the recovery.

"We've had 13 years of his economic mistakes. Britain can't afford five years more."


Why the UK knew

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Fri, 16/04/2010 - 08:23

This is from the Black Report and is a firm indication that the UK Authorites knew many months in advance of the debacle that was about to unfold on depositors in ALL the Icelandic banks, they did nothing until the last second and threw the Crown Dependencies to the dogs in the process. If of course they had even looked to see if they were there! There is even an implication that the Bank of England let the Icelandic banks go down by not responding at all to the request for a currecny swap, not a good idea in iteslf, but a precursor to a meet that might have had more positive results.

"On 15 April 2008 Mr. David Oddsson sent a formal request for a currency
swap agreement to the Bank of England. Mervyn King, Governor of
the Bank of England, replied to Mr. Oddsson’s letter on 23 April and rejected
the request by the CBI. However, he declared that foreign central banks could
help Iceland find an effective way to reduce the size of its banking system. In
his opinion, this was the only practical solution to the problem. In closing,
King said that he offered all the help he could provide to tackle the issue at
hand. The CBI did not accept this offer. Instead, a reply was sent to the Bank
of England, kindly asking it to revise its position regarding the said swap
agreement. There was no reply to that letter.

After the G10 Summit of central bank governors in Basel on 4 May 2008,
it became clear that neither a currency swap agreement with the Bank of
England nor with other central banks, with the exception of the Danish,
Norwegian and Swedish ones, was on offer to the CBI. In a letter to the
Investigation Commission, Stefan Ingves, Governor of the Central Bank of
Sweden, makes it clear that unclear ownership, along with the banks’ rapid
balance sheet growth had led to a dangerous situation and that the Icelandic
government did neither seem to fully grasp nor understand how to deal with
it.
In the spring of 2008, only the Danish, Norwegian and Swedish central banks were willing to enter into currency swap agreements with the CBI,though not without insistence. As a precondition for such agreements, they insisted that the prime minister pledged to put pressure on the Icelandic banks to reduce the size of their balance sheets, in view of the proposals made by the IMF. The facilities from the Nordic central banks were conditional on the Icelandic government taking action to have the CBI and the FME take certain political measures and actions. The ministers signed the declaration in 15 May 2008, along with the Board of Governors of the CBI. The declaration was not made public, nor was it presented at a government meeting. The aforementioned promises by the government in the summer of 2008 were not kept. That did not improve the reputation of the Icelandic authorities with foreign central banks. At this time, the Icelandic authorities had become very isolated in the international community. Therefore, they had few to turn to when the Icelandic banks collapsed in October 2008".


"There is even an implication

  • dawes
  • 24/10/08 31/05/09
  • unspecified
  • Offline
  • Wed, 05/05/2010 - 21:50

"There is even an implication that the Bank of England let the Icelandic banks go down by not responding at all to the request for a currecny swap, not a good idea in iteslf, but a precursor to a meet that might have had more positive results."

Are you suggesting that the UK taxpayer should have bailed out the Icelandic economy by giving them £500million and losing half or more of it when the Krona collapsed? What happened to that currency was entirely predictable, Iceland was asking for a grant.


@Dawes

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Thu, 06/05/2010 - 06:55

I am implying that the UK administration, from the BoE to Downing St, knew that the Icelandic banks were in trouble and did not act accordingly. Unlike the statements made by such as HM treasury, note Ice's latest brush with them for instance, I've had many, who always say that the collapse was very sudden, they were in fact aware many months beforehand. I am implying that this was almost a plan!! I am implying that for a measly few hundred million, peanuts in the overall scheme of things, a great deal of pain could have been avoided. And yes I know a currency swap wasn't a good option, but other ways could have been found, they simply didn't want to look Dawes, or were to incompetent too. I am implying that the UK through the FSA could have advised the IoM of the perilous state of the Icelandic finances and that money was not safe in an Icelandic bank. That does not by the way let the FSC off the hook for being as poor as the FSA at their work.

But then as Ice's latest exchange, so similar in tone to many others depositors have had, the UK authorities are in denial.


Yes, they knew.

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
  • Offline
  • Sun, 18/04/2010 - 05:50

They are dissembling with a vengeance.
The evidence they were watching, which is from sources obscure to most of the depositors, was startingly clear.
I think it was Cashen, or was it Gellen (what is the diffence?) that said they were working "long hours".
I am not going to go into drunken hyperbole here, I am just going to attempt to confirm the obvious analysis.
The directors silence, justice delayed is justice denied, approach is simply disgusting. The directors know. Their lawyers know. Don't you Cashen? Don't you Gelling? As for Davies. You were the most stupid, you left you own wealth in danger until the last minute. Then you pulled rank! And you really believe that anybody believes your statements of 'coincidence? You are without shame. But so is the IoM, Bell, Brown, Gawne, Aspden, even the judiciary. Only the idiots on the TSC (IoM) would believe so, publicly. But privately they know. They know that you stink to high heaven. But what is their purpose?
No wonder you resigned so quickly. You want to debate this?
Now what is going to happen now?
They were praying, they accommodated themselves to the hope that all wouldn't crash. Formal risk management went out of the window. These people would fail any basic course on risk management in any part of the world.
That makes their legal position very, very, compromised. I believe they were greedy (negligent).
If they weren't relying on the partiality of the legal system of the IoM they would be very frightened.
I've worked with lawyers. Heads of Department. In my opinion the IoM judiciary stink.
Our position is compromised by this fact.
Andrew.. think again.


Yes, they knew.

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
  • Offline
  • Sun, 18/04/2010 - 05:39

They are dissembling with a vengeance.
They evidence they were watching, which is from sources obscure to most of the depositors, was startingly clear.
I think it was Cashen, or was it Gellen (what is the diffence?) that said they were working "long hours".
I am not going to go into drunken hyperbole here, I am just going to attempt to confirm the obvious analysis.
The directors silence, justice delayed is justice denied, approach is simply disgusting. The directors know. Their lawyers know. Don't you Cashen? Don't you Gelling? As for Davies. you were the most stupid, you left you own wealth in danger until the last minute. Then you pulled rank! And you really believe that anybody believes you statements of 'coincidence? You are without shame. But so is the IoM, Bell, Brown, Gawne, Aspden, even the judiciary. Only the idiots on the TSC (IoM) would believe so, publicly. But privately they know. They know that you stink to high heaven.
No wonder you resigned so quickly. You want to debate this?
Now what is going to happen now?
They were praying, they accommodated themselves to the hope that all wouldn't crash. Formal risk management went out of the window. These people would fail any basic course on risk management in any part of the world.
That makes their legal position very, very, compromised.
If they weren't relying on the partiality of the legal system of the IoM they would be very frightened.
I've worked with lawyers. Heads of Department. In my opinion the IoM judiciary stink.


Independent Icelandic News - The Black Report.

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Tue, 13/04/2010 - 10:17

http://icelandtalks.net/?p=1017

The shroud has officially fallen. The Black Report.
April 12, 2010
By admin

So what is in the “Black Report”?

English summary of the report is here.

In very short, the report is massive, but in this first hour of its release this is it so far.

The banks gave their owners far to much loans and the banks worked for the biggest shareholders (owners and their friends) and ignored the general shareholder.

Morality and social norms went out the window. Self interest, theft, no clue for consequences of their actions (they did not care or take it into account) and last but not least vices became virtues, and virtues became vices.

Davíð Oddsson attacks the report committee for being unqualified, and claims they need other relevant material to throw at the old regime at the Central Bank. He did not trust ministers and with held information. Megalomania and pure madness is evident.

Björgvin G Sigurðsson minister of Banking… “I knew nothing” and “on the contrary, I reacted correctly to all obstacles”.

Jón Ásgeir and his family, and his companies, like Baugur had borrowed to much from all the banks. In very short, He was to big to fail. The whole system, banks, businesses like his all got so mixed together that they had to carry on supporting a broken system. The banks gave him to much and so he controlled them because they could not bankrupt him. In short: He raped the system, the nation and the Icelandic public. Nobody dared to press charges out of fear of total collapse. At the same time, he cashed in, borrowed, stole and got away with it.

Björgólfur Thor: He took massive amounts of money from Landsbanki in the last days before the fall, to save his company Actavis from falling into the hands of Deutsche Bank. That bank now has Actavis, but where is all the money?

Jónas Fr. Jónsson: Head of the FME (financial authority) sat in the toilet reading the funny pages. He did not do anything, he had no clue what he was supposed to do, and he was in the pocked of bank owners. He joined them for lunch and golf. He did not even wash his hands.

The government should have reacted back in 2006. They did not.


Accepting Responsibility for Iceland's Financial Disaster

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Tue, 13/04/2010 - 10:01

http://www.huffingtonpost.com/iris-lee/accepting-responsibility_b_533476...

Accepting Responsibility for Iceland's Financial Disaster

Iris Erlingsdottir
Iris Erlingsdottir

  Comments 6

After months of eager anticipation and numerous delays, the investigative committee created by Iceland's legislature to investigate the dramatic collapse of the country's financial institutions will release its report tomorrow. Amazingly, there have been no leaks of any of the reports 2,000 pages, so the report's contents will hit with full force.

Human nature being what it is, however, the individuals and organizations that are expected to be portrayed negatively in the report have started distancing themselves from responsibility. Davíð Oddsson, who was Iceland's Prime Minister when the banks were privatized and the Head of its Central Bank when the banks collapsed, has gone overseas, despite the fact that he is now the editor-in-chief of Iceland's leading newspaper. Presumably, his answers to the committee were similar to those given by for American Central Bank chairman Alan Greenspan in his testimony before Congress last week: "I was right 70 percent of the time, but I was wrong 30 percent of the time."

"The report will probably tell us what we already suspect and even know," Lára Hanna Einarsdóttir, one of the country's most prominent bloggers, said. "It will definitely add something in terms of factual knowledge, and it will probably tell us more about the part politicians played. The question about who the chief culprits are will not be directly answered; it will be interesting to see how different factions will interpret that part. Each group will try to protect "their men" and try to exaggerate the part of others."

Undoubtedly, mistakes were made. The sheer scope of Iceland's failure is indisputable proof of that. And yet, no one has accepted personal responsibility for any error in judgment or oversight. No criminal charges have been filed. No fines have been assessed.

Although it's highly unlikely that any revelations in the so-called "Black Report" will cause anyone to publicly repent and beg forgiveness, Iceland appears to be approaching a tipping point -- perhaps people who were "in the know" will finally start coming forward with personal information -- former Glitnir accountants, attorneys, employees - something that really hasn't happened. "I cannot describe how much I hope for that," said Einarsdóttir. "It is so sorely needed. There are so many people who know so many things but have not said a word. I often hear it said that these people are afraid - the "fear society" is still alive and well, you know. And people are afraid to lose [their livelihood], the risk is enormous, that is obvious."

The complexity and the scope of the fraud perpetrated are unprecedented, and Iceland's resources following the collapse in October 2008 were compromised, to say the least. The regulatory agencies had been overwhelmed by the rapid growth of Iceland's financial institutions, and experienced heavy turnover, as their employees left to work at the banks they had been charged with regulating. They were highly politicized and had no incentive to shut the light off while the party was going full bore.

As Gunnar Andersen, the current director of the Financial Supervisory Authority (FME), recently told me:

"It is clear now that the financial information presented in annual reports, in annual accounts, the yearly reports did not really reflect the true situation as we now know, with all the write-offs that the banks have gone through. ... [T]he banks were very large and had a lot of influence on society as a whole, and the FME was understaffed and had huge turnover, it was very difficult to regulate and to supervise and regulate those entities effectively -- because they grew so fast between 2000 and 2008 and the assets of the regulated entities in Iceland grew by 554% while the staff here only doubled -- we also lost a lot of people to the banks. The FME was a training ground for lawyers and others."

The tax and regulatory authorities have been reorganizated under the government that took power after the Pots-and-Pans revolution in January 2009. It has taken time to find unbiased individuals capable of untangling the webs woven by the scheme leaders, but they are getting up to speed and appear close to cracking down on the worst offenders.

Last week, the resolution committee of Glitnir -- one of the three banks that failed -- brought suit against the owners of the majority of the bank's stock--Jón Ásgeir Jóhannesson and Pálmi Haraldsson -- and four prominent bank executives -- three of whom are still employed there -- to recover ISK 6 billion they allegedly owe. The committee used the services of Kroll, an international fraud investigation company, to identify questionable arrangements and to hunt down purloined assets.

Ólafur Thór Hauksson, the special prosecutor appointed to investigate potential criminal activity in connection with the banks' collapse, had little experience in financial crime. With the help of internationlly-known white collar criminal prosecutor, Eva Joly, and their staff, Ólafur has been methodically examining the bank books and other relevant documents and started conducting raids in Iceland and abroad earlier this year. Although Ólafur and Eva have both warned the public that these things take time, it would be reasonable to assume that the first round of indictments are forthcoming.

Although many within Iceland do not believe that the Black Report will have any effect on the old Icelandic power structure, I believe that it will be an important brick in the wall of a new structure for governing Iceland. The gross abuses of the past decade were possible only because of a complete lack of transparency and oversight. Public disclosure of the incompence and fraud that led to the worst recession our country has known in recent times is necessary to ensure that in the future, bankers, businessmen, regulators, and politicians realize there are adverse personal consequences for their dishonest actions and lax oversight.

There is a human tendency to want to move on, to sweep unpleasant episodes under the rug and act like everything is hunky dory. We cannot allow this to happen this time. To learn from our mistakes, we must first understand exactly what those mistakes were and how they were permitted to happen. Only then can we set up institutions and legislation to preclude their recurrance and develop enforceable ethical principles to ensure that licensed professionals (lawyers, accountants, etc.) do not facilitate abusive practices.

It would be a pipedream to expect the worst offenders to come forth and assist us in this quest. Accordingly, we must, as a people, decide exactly what we want. The Þjóðfundur--or the "Anthill"--that met in November 2009 decided that integrity was the Iceland's single most important value. I can't imagine how we can develop a society based on that concept until the individuals that failed us man-up and accept responsibility for their actions. It may mean that some of them will go to prison; it may mean that they will lose their fortunes. There can be no responsibility without personal loss proportionate to their ill-begotten gains.

Andersen acknowledges that "we've had a lot of difficulties, but that doesn't relieve the FME of all responsibility because frankly, it should have dug deeper and much more critically." To this end, Andersen tells me that the FME has added a forensic accounting department, and is developing significant institutional expertise in analyzing financial reports. New legislation similar to that proposed in the United States have been proposed to limit the risk to which banks can subject themselves. It would give the FME wider authority, and introduce certain limitations and restrictions on some of the things that led to the crash, such as the banks taking loan shares of collateral for loans that were dispersed specifically for buying their shares in the same institutions. It would also impose stricter requirements on internal auditors and their qualifications and on the participation of the banks in corporate activities through ownership.

To his credit, Bjarni Benediktsson, the new leader of the Independence Party, which was in power during the entire period of lax regulatory oversight, has called off the dogs in his party and stated that they must take the Black Report extremely seriously and try to learn from its findings. However, his party has much to answer for and should not be allowed to resume its rule of Iceland with a simple apology, though that would be a good start. It and all other political parties must publicly repudiate the leaders who used their political power for personal gain, as well as those whose irresponsible oversight brought Iceland to the brink. They must provide a set of principles to guide Iceland to a fairer future.

As Andersen and others have acknowledged, Iceland's return to financial stability is not guaranteed. Factors outside of our control may keep us from ever regaining the level of prosperity we knew in 2007. However, it is within our power to ensure that our society regain some level of self-respect and of fairness. The Black Report will not, by itself, transform our political system. However, it is an important piece of the puzzle.

Warren Buffett once observed that "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently." The reputation we had built over the centuries was destroyed by the irresponsible acts of a few individuals. Rebuilding it will be long, slow, but necessary, work.


Bribery, fraud, theft.

  • dawes
  • 24/10/08 31/05/09
  • unspecified
  • Offline
  • Tue, 13/04/2010 - 13:54

Bribery, fraud, theft, organised crime.

These are the words missing from the report.


Of course there are words missing...

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
  • Offline
  • Sun, 18/04/2010 - 06:29

The normal take of such a report is that it exists to escape responsibilty.

Our task is to contradict, refute, deny this result.

Those that read this might add their voice.


Mustn't jump to conclusions

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Tue, 13/04/2010 - 22:09

Mustn't jump to conclusions dawes, they did give a report to the Special Prosecutor to follow up on alleged criminal activities, but the implications are there.

Here is an item from Icenews about the reaction to the report in Icelpand, jail sentances are mentioned:
Reactions to Iceland banking report
Posted on13 April 2010
"As could be expected yesterday’s release of the report into the banking collapse, commissioned by the Icelandic parliament, drew different reactions from different people.

Bjorgvin G. Sigurdsson, Iceland’s former Minister for Commerce, was one of those personally singled out for criticism. He reacted by resigning his post as chairman of the parliamentary group of Social Democrat MPs and called publicly for a national ‘high court’ to be called together to pass judgement. Sigurdsson was singled out for being negligent; but the report also stated that he had been deliberately kept in the dark on many important issues by others in government and the central bank.

Former Prime Minister Gier H. Haarde was another singled out for having been negligent and RUV reports that he could technically face two years in jail if the aforementioned ‘high court’ is called to session. Haarde said, however, that he has no fear of such a court. He told media that the report is very clear that by far the biggest share of blame must be laid with the banks themselves and their irresponsible business practices. He said the report shows the banks were already beyond saving in 2006.

Former Central Bank head David Oddsson is out of the country and was not interviewed.

Left Green leader Steingrimur J. Sigfusson told parliament that the report is the story of how Iceland’s cherished Nordic welfare state had been robbed by those wielding imported free-market, low regulation ideals. He also joined the report in criticising President Olafur Ragnar Grimsson for having been a cheerleader for the Outvasion Vikings and taking personal profit (not in direct payment) from their business practices.

Current Prime Minister Johanna Sigurdardottir said she took from the report that the banks had been run for the benefit for their biggest shareholders with scarcely a thought for customers or the average shareholder".


A few salient points

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Fri, 16/04/2010 - 08:26

The Black report devotes entire sections to Robert Tchenguiz, his name crops up more than 100 times, and reveals him to be the Icelandic banking system's largest borrower.

Kaupthing backed some of Mr Tchenguiz's most high-profile acquisitions, including stakes in Sainsbury's, Mitchells & Butlers, Whitbread, Town & City Pub Company and Bay Restaurant Group and Somerfield with £1.4bn of debt.

The report found that Kaupthing – which conducted two-thirds of its business in London – secretly owned almost half of its own shares.

It goes into some detail about Kaupthing's relationship with key clients. In particular, it notes a huge increase in loans to Mr Tchenguiz's companies in early 2007 at around the time he became a board member of the bank's largest shareholder, an investment firm called Exista.

It says Mr Tchenguiz was a part-owner of Exista, adding that a "sharp increase in facilities to Mr Tchenguiz in the period January 2007 to October 2008 is interesting in this light".

The document goes on to describe how Mr Tchenguiz "benefited from particular goodwill among the bank's management, making its facilities easier to access than otherwise".

Rather than start calling in Mr Tchenguiz's loans when his companies were suffering margin calls in 2008, the bank carried on lending its key client more money.

At this time, the British regulator knew the bank was having liquidity problems and still allowed Kaupthing to set up retail operations attracting £2.5bn of deposits from UK savers in April – a move that is now under investigation by the Serious Fraud Office.

In the first nine months of 2008, in the throes of the credit crisis, Kaupthing awarded Mr Tchenguiz an additional £170m to meet margin calls from its subsidiaries in Luxembourg and the Isle of Man, plus Morgan Stanley and Dawnay Day.

Mr Tchenguiz claims he is a creditor of the failed bank owed £650m and is likely to launch legal action based on the argument that the bank misrepresented its position. A source close to the Tchenguiz family said the bank entirely misrepresented its position and investors had no idea about the scale of Kaupthing's problems.

The Icelandic MPs behind the report are unable to explain exactly why the bank's patronage to Mr Tchenguiz was so great.

The investor is known to be a longstanding friend of Dorrit Moussaieff, the wife of Iceland's president, but he only started doing business with Kaupthing relatively late in his career.

One theory is that the property investor became a valuable contact in London society for introducing new clients. The report mentions that he introduced two other property investors, Moises and Mendes Gertner, whose share dealings with Kaupthing are now under scrutiny by a special investigator.

Regardless of Kaupthing's motives for its relationship with Tchenguiz, the report concludes that it is "difficult to see how loans of this magnitude were taken with the bank's interests in mind".

However, Mr Tchenguiz steadfastly regards himself as a victim in the crisis – claiming to have lost around £1bn – and says his loans were not against the bank's rules.

The following is an extract from Chapter 2, Executive Summary
The Prime Minister, the Minister for Foreign Affairs and the Minister of

Finance met with the Board of Governors of the CBI on 7 February 2008.
During the meeting, the Chairman of the Board of Governors painted a very
bleak picture of the state and future prospects of the Icelandic banks. The
information indicated an imminent danger for the Icelandic economy. The
Board of Governors also met with the Prime Minister and the Minister for
Foreign Affairs on 1 April 2008. In that meeting, the Board informed the ministers
that GBP 193 million had been withdrawn from the Icesave accounts
in London during the previous weekend. The Board also said that Landsbanki could withstand such an outflow for six days. Neither the Prime Minister nor other ministers of the government who were informed about this reacted by resorting to active and credible measures.

It is clear from the events during the year leading up to the collapse of the banks that a certain degree of mistrust and cooperation problems existed between Mr. Oddsson, Chairman of the Board of Governors of the CBI, and most of the ministers of the Social Democratic Alliance. It is also clear that the previous cooperation in the political arena between the Chairman of the Board of Governors of the CBI and the Prime Minister, as well as their long standing friendship, had an influence, as described by the latter, on the way in which people construed the exchange of information between government leaders and the Chairman of the Board of Governors of the CBI. In the period leading up to the collapse of the Icelandic banks, Mr. Davíð Oddsson’s previous political career thus had an influence, according to the description given by the ministers of the government that took office in May 2007, on how ministers responded to the information which he provided to them in
the course of his duties as Chairman of the Board of Governors of the CBI.

During the meetings of the Board of Governors of the CBI with ministers,the bank would not be in the habit of handing out documents with summarised information, along with the bank’s review of that information and proposals for actions, where applicable. This is cause for wonder. During some of these meetings very alarming news were heard. The discharge of official duties by the Board of Governors of the CBI was, in this regard, not as thorough as might have been expected. Due to this fact, the ministers no doubt had difficulties assessing the right course of action, not in the least in view of the difficult relations between the ministers of the Social Democratic Alliance and the Chairman of the Board of Governors of the CBI. On the other hand, the ministers apparently did not call for such proposals and documents from the CBI, once important information had been verbally conveyed to them.

They had, however, ample reason to do so. Furthermore, ministers were not generally in the habit of recording minutes of their meetings with the Board of Governors, even though there was every reason to do so, in light of the important information often communicated there.


Youtube - black report being read...

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Tue, 13/04/2010 - 09:53

My Icelandic is non-existent but you can view a bit of the reading of the black report. Will take about -5 days to read out. Will be rivetting viewing - hence the numbers in the theatre. I think "Avatar" will have done better in the box office but good to see the people of Iceland being treated to an honest enquiry into the banking crisis and who contributed to it!


With loads of help from

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Tue, 13/04/2010 - 13:21

With loads of help from Iceland Weather Report, this is the crux of what was being said apparently! Can't vouch for it 'cos I can't speak Icelandic and yes it's in reversve order, but.........

Nordal describes competition between bank execs – “mine is bigger than yours”.

Education and experience within banks was shallow. Lack of deeper insight into banking.

More ppl in entertainment committees within banks than in regulatory departments. (!!)

“A nation-wide disregard for laws and regulations”. Amen!

Up now Salvör Nordal, head of Ethics Institution (Siðferðisstofnun) at U of Iceland

Media coverage was dictated by financial institutions. Very difficult for public to form independent opinion.

Academic community also failed. Too many linked interests between commercial sector and universities

Independent analysis by media was sorely lacking.

“Image became more important than reality”.

“Social responsibility” of banks was limited to their grants to cultural institutions etc. i.e. image-enhancement.

Banks paid high grants to politicians, which reduced their capacity to criticize.

Abolishment of National Economic Institute (by Davíd Oddsson) meant there was no independent institution to deal with economy.

Events show highly damaging effects of political appointments (e.g. Davíd Oddsson?)

Regulatory agencies were too close to financial institutions.

Up now is Vilhjálmur Árnason, prof. in philosophy, discussing ethics in connection with collapse.

Man, the list of incompetence is endless. Srsly, this is too tragic for words.

When questioned by committee about their responsibility, most players replied “it wasn’t my department”.

Iceland was virtually isolated internationally by the time the collapse came in Oct 2008. This information is new.

Pressure from abroad began in early 2008 to scale down the banking sector. Icelandic authorities did not comply

Emergency laws were composed in a couple of days in early October 2008, with NO expert input.

No formal action plan existed to respond to the crisis

Three Ministers were involved with Icesave, but there was no joint pressure on Landsbanki to move accts into subsidiary

The level of incompetence in Icelandic government in lead up to collapse is staggering

… but Minister of Banking Affairs was NOT included, nor informed of those meetings!!

Endless meetings between government and Central Bank in 2008 …

Government focused too much of the IMAGE PROBLEMS of financial institutions, rather than real issues.

Páll Hreinsson, head of committee, is now talking about responsibility of government.

Banks’ assets were overstated by ISK 7,400 BILLION before collapse.

All banks guilty of market manipulation, lent money to buy shares in banks themselves, to raise share prices.

Description of desperate actions by banks to help owners in days before collapse.

Central Bank issued loans despite expansion in economy and should have raised interest rates 2005 and 2006

Boy, Office of Special Investigator sure has his work cut out!!

… seems to be alluding to Icesave money having been stashed in tax havents.

… committee member emphasizes that “foreign agents” can also mean Icelanders with foreign ID, e.g. in Luxembourg

Icesave money coincided with major growth in lending at Landsbanki, mostly to foreign agents …

RT @finnsson Davíd Oddsson is mentioned on 256 pages of 2,383 … 10% of pages in report.

God, the mismanagement within the banks just BOGGLES the mind.

– So far nothing we didn’t already know. But good to have it summarized and encapsulated

Money market funds invested mainly in companies linked to bank’s owners.

Committee concludes that ALL banks loaned unduly to their main owners.

Financial Supvervisory Authority (FSM) was undermanned and lacked skilled staff. Did not enforce regulations as they could have.

Banks grew 20-fold over seven years, mostly on foreign loans

committee member going over failure of banks and reasons for it. Outrageous.

main reason for collapse of banks was their size and supervision was lacking

Committee delivered its findings of suspected criminal activity to Special Investigator yesterday

Head of investigation committee giving overview of contents of report

It’s Black Report day!


Icelandic leaders accused of ‘negligence’

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Tue, 13/04/2010 - 09:46

http://www.ft.com/cms/s/0/82bb2296-4637-11df-8769-00144feab49a,dwp_uuid=...

Icelandic leaders accused of ‘negligence’

By Andrew Ward in Stockholm

Published: April 12 2010 16:20 | Last updated: April 12 2010 22:43

An official report on Monday accused the Icelandic government and regulators of “extreme negligence” in the run-up to the country’s 2008 banking crisis.

Geir Haarde, former prime minister, and David Oddsson, former prime minister and central bank governor, were among those blamed for the crash.

The independent “truth commission” appointed by parliament to investigate the crisis also pointed to possible illegality within the banks, including share price manipulation and exaggeration of asset values.

The 2,000-page report marks the most in-depth account to date of one of the world’s wealthiest economies brought to the brink of bankruptcy in October 2008 by the events that led to the catastrophic collapse of Iceland’s three main commercial banks.

It has been handed to the Icelandic special prosecutor who is conducting a separate criminal investigation into the crisis.

Countdown to collapse

From ‘pretty good’ to ‘the end’ in five months

March 3 2008
David Oddsson, Iceland’s central bank governor, tells Mervyn King, his British counterpart, that the “situation of the banks [is] pretty good”


March 30 2008
In a meeting at Iceland’s central bank, Sigurjón Árnason, Landsbanki chief executive, describes the UK-focused Icesave online bank as a “time bomb”. He said: “The likelihood that the Icelandic banks would get through this is very, very little”


July 31 2008
Mr Oddsson confronts Mr Árnason and another Landsbanki executive over the mounting danger.

“The two of you cannot bankrupt the nation,” he warns


September 2 2008
Alistair Darling, British chancellor, asks Iceland’s chief financial regulator: “Do you not understand how serious this is?”


October 4 2008
“We received a phone call, the Icesave website was down, and at that point the end was self-evident,” said Jón Ásgeir Jóhannesson, the main owner of Glitnir Bank.

The commission criticised regulators for failing to rein in the banks – Landsbanki, Glitnir and Kaupthing – as they grew 20-fold in size between 2001 and 2008 until their liabilities far exceeded the country’s ability to bail them out.

“We gave the banks free rein to gallop around without any understanding of the incentives that were driving growth and the potential costs of a crisis,” Sigridur Benediktsdottir, one of the commission members, told the Financial Times.

All the ministers and officials censured by the commission have left office since the crisis, limiting the political fallout.

Johanna Sigurdardottir, prime minister, said the “painful truths” would help bring “closure” for the island nation of 320,000 people as it tries to recover.

“Mistakes were certainly made. The private banks failed, the supervisory system failed, the politics failed, the administration failed, the media failed, and the ideology of an unregulated free market utterly failed,” she said.

The report accused the banks of lending too readily to their own owners, who were the biggest borrowers in all three institutions. Many of the loans were used to buy shares in the banks, which inflated the stocks.

About a quarter of the banks’ combined capital base was financed by their own lending, the commission said.

Many of the loans were used to buy shares in the banks and related companies, the report added, inflating the value of the stocks.

“According to all the loan books from the banks, all the former owners of the three banks had inappropriate loans from the banks,” said Ms Benediktsdottir.

The banks were used by their owners – known as the “Viking Raiders” – to finance the expansion of big overseas business and financial empires, including extensive investments in the UK retail sector.

A summary of the report has been handed to the Icelandic special prosecutor who is conducting a separate criminal investigation into the crisis.


Seeds of crisis sown years before crash

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Tue, 13/04/2010 - 09:43

http://www.ft.com/cms/s/0/c546dbd4-4676-11df-9713-00144feab49a,dwp_uuid=...

When Sigurjón Árnason, former chief executive of Landsbanki, appeared before Iceland’s independent “truth commission” last summer, he recalled the sense of confidence that pervaded the country’s banking sector until 2008.

It had “not occurred to anyone that there was a remote chance of a collapse like that which [would] later come to pass”, he said, according to the long-awaited commission report into the Icelandic bank crash published on Monday.

It was a complacency that spread from the bank headquarters to the regulators, central bank, government and, ultimately, the Icelandic public, most of whom were happy to share in the spoils of the financial boom.

Yet the commission report – the result of a 15-month investigation by an independent panel appointed by Iceland’s parliament – says the warning signs should have been clear long before Mr Árnason warned the central bank in March 2008 that Landsbanki was sitting on a “time bomb”.

The seeds of crisis were laid several years earlier, when, unshackled by government liberalisation of the financial sector, Icelandic banks set out to turn their isolated Atlantic island nation into an international financial centre.

In 2005 alone, the three big banks – Landsbanki, Glitnir and Kaupthing – issued about €14bn in foreign debt securities, most of it maturing in three to five years.

It was the equivalent, said Sigridur Benediktsdottir, one of the commission members, of US banks issuing $14,000bn in debt, considering the respective sizes of the two economies.

Buoyed by Iceland’s triple-A credit rating, refinancing was not a problem as long as global markets were benign.

But when the economic skies darkened in 2007, the banks were forced to scramble for new sources of funding.

Their solution was to open overseas branches that attracted billions of pounds and euros in deposits from foreign savers attracted by some of the highest interest rates in the market.

Foreign deposits became a crucial source of funding for the banks as the credit markets seized up, but they greatly increased the systemic risks facing the tiny Icelandic economy.

By the middle of 2007, deposits in Landsbanki’s UK branch, which included the popular Icesave online bank, amounted to £5.5bn.

“In light of the fact that the foreign currency reserves of the Central Bank of Iceland were only £1.2bn at that time, it may be viewed as certain that the Central Bank would not have been able to act as a lender of last resort to Landsbanki if that proved necessary,” the report said.

The commission catalogued a series of increasingly fraught meetings between Icelandic and British officials in the run-up to the crash as UK regulators pressed Landsbanki to transfer the Icesave accounts to a UK subsidiary that would fall under the remit of the British deposit guarantee fund. Landsbanki dragged its feet on the move – leaving Icelandic taxpayers with a €3.9bn bill for the Icesave losses.

“In seven years [before the crisis] the three banks became 20 times bigger and that is the main reason for the fall of the economy,” said Ms Benediktsdottir.

The report outlined how the banks were used by their owners – known as the “Viking Raiders” – to finance the expansion of big overseas business and financial empires, including extensive investments in the UK retail sector.

“According to all the loan books from the banks, all the former owners of the three banks had inappropriate loans from the banks,” said Ms Benediktsdottir.

Many of the loans were used to buy shares in the banks and related companies, the report added, inflating the value of the stocks.

About a quarter of the three banks’ equity was tied up in loans to their main shareholders before the crisis.

C


Iceland at risk of junk credit rating

  • glen07
  • 21/10/08 n/a (free)
  • a depositor
  • Offline
  • Tue, 13/04/2010 - 09:40

http://www.ft.com/cms/s/0/402ab31a-419b-11df-865a-00144feabdc0,dwp_uuid=...

celand at risk of junk credit rating

By Andrew Ward in Stockholm

Published: April 6 2010 22:10 | Last updated: April 6 2010 22:10

Iceland risks having its credit rating downgraded to junk status if it fails to resolve the Icesave debt dispute with Britain and the Netherlands, Moody’s warned on Tuesday.

The credit rating agency downgraded its outlook for Iceland to negative from stable amid deadlock in negotiations over €3.9bn lost by British and Dutch depositors in the collapsed Icesave online bank.
EDITOR’S CHOICE
In depth: Icelandic economy - Sep-17
Iceland PM confident of Icesave deal - Mar-05
Icelanders confused on repayment vote - Mar-05
Icesave referendum to go ahead - Mar-04
Iceland renews talks on €3.9bn debt dispute - Feb-28
Lex: Iceland - Feb-26

The move came a month after a deal to repay the money was rejected by 93 per cent of Icelandic voters in a referendum, in spite of warnings from the UK that the country risked isolation if it failed to settle the debt.

The dispute has held up crucial economic support from the International Monetary Fund and other lenders because the loans, agreed after the Icelandic banking sector collapsed in 2008, were conditional on Reykjavik fulfilling its international obligations.

Moody’s said the country’s sovereign rating – currently one notch above junk status at Baa3 – could be placed on review for downgrade if the dispute continued to obstruct access to international finance.

“The recovery of the Icelandic economy is threatened by the delays in the resolution of the Icesave dispute,” said Kenneth Orchard, head of Moody’s sovereign risk group.

The Icelandic government has repeatedly stressed its commitment to reimbursing the money but it wants Britain and the Netherlands to accept softer repayment terms amid public anger that taxpayers are being asked to pay for the mistakes of bankers and regulators.

Reykjavik called for fresh negotiations after last month’s referendum but no more talks have taken place, in part because of political uncertainty in Britain and the Netherlands ahead of elections in both countries.

Moody’s stressed there were no immediate payment concerns surrounding Icelandic sovereign debt and said a resolution of the Icesave dispute remained the likeliest outcome. However, it warned that the stalled negotiations raised questions about the country’s ability to refinance eurobonds maturing in December 2011 and May 2012.

The Icelandic central bank projects it will have enough foreign currency reserves to repay them even without IMF loans but acknowledged last week that the repayments could “bring reserves down to critically low levels”.

Reykjavik is pressing the IMF to resume lending regardless of the Icesave impasse, saying it is unfair for Iceland to be penalised for what it views as a bilateral political dispute with Britain and the Netherlands.


The Telegraph article arny referes to

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Tue, 13/04/2010 - 06:01

Iceland lifts lid on banks 'excessive loans' to billionaires
Iceland’s banks gave “excessive” loans to a handful of powerful billionaires, including Robert Tchenguiz, the property entrepreneur, Jon Asgeir Johannesson, the retail tycoon, and Bjorgolfur Gudmundsson, the former owner of West Ham FC, according to a damning inquiry.

By Rowena Mason
Published: 6:00AM BST 13 Apr 2010

Iceland's banks gave "excessive" loans to a handful of powerful billionaires, including Bjorgolfur Gudmundsson, Robert Tchenguiz, and Jon Asgeir Johannesson. Its parliamentary investigation – The Truth Report – found numerous potential cases of illegality, including possible share price manipulation and exaggeration of asset values, within the island nation’s three banks – Kaupthing, Glitnir and Landsbanki.

The long-awaited report also suggests that the banks were effectively controlled by five investors wielding “unlimited influence”, with some acting as shadow directors. The report accuses the bank’s owners of pressuring management into awarding loans to their companies and friendly clients, with little or no collateral.

Related Articles
Iceland's got its Truth Report - what about one for the UK?
Former Baugur boss Jon Ásgeir Jóhannesson sued for £30m by collapsed Iceland bank Glitnir
What ugly secrets will Iceland's meltdown expose? The UK lost £8bn in the Icelandic collapse of October 2008, and charities and councils are still waiting for £1bn in compensation. Most controversially, the Treasury bailed out 300,000 British savers with Landsbanki’s high-interest Icesave accounts, sparking a diplomatic row over the responsibility for the £2.3bn bill this produced.

It emerged in the report that companies connected to Mr Gudmundsson, whose family owned 40pc of Landsbanki, had borrowed almost as much as the entire £2.3bn Icesave debt to finance their own private investments. The loans amount to 140pc of the bank’s equity.

The report quotes Sigurjon Arnason, ex-chief executive of Landsbanki, as saying: “Resisting the requests from the owners of the banks would have equalled quitting from my position.”

The report also criticises Kaupthing’s loans to London-based property entrepreneur Mr Tchenguiz, whose companies received £1.4bn.

“We consider that Kaupthing’s loans to Robert Tchenguiz and companies have been in excess of that which could reasonably be considered a commercial assumption. Rules on large exposures were not followed,” it says. The report adds that it is “difficult to see how loans of this magnitude were taken with the bank’s interests in mind”.

Mr Tchenguiz, who owned large stakes in Sainsbury’s and Mitchells & Butlers before they were seized by Kaupthing’s winding-up committee, was not a direct shareholder. However, he sat on the board of Exista, an investment firm that owned 23pc of the bank. He denies any wrongdoing and said his loans were not against the rules.

Mr Johannesson, the former boss of failed British retail giant Baugur, a current director of House of Fraser and chairman of Iceland Foods, also comes under ­scrutiny for his role at Glitnir. Companies connected to Mr Johannesson, one of Glitnir’s biggest shareholders, borrowed £3.5bn.

The 2,000-page document is heavily critical of Iceland’s former ruling political party.

It says ex-Prime Minister Geir Haarde acted with “gross ­negligence” and reveals that former central bank manager David Oddsson turned down help from his UK counterpart Mervyn King.

The banks’ owners and key shareholders have all repeatedly denied any wrongdoing.


I'm innocent!

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
  • Offline
  • Tue, 13/04/2010 - 07:19

What do we expect them to say?

But how do we get justice?

Justice in the IoM? There isn't currently any justice in the IoM. Justice (in the IoM) is blind (corrupt?). Yes I think it is corrupt.

But they don't care. Why? Because they have control. They know that. They stink, from the ''Brown' downwards.. Brown-nosing is their speciality. Only the corrupt bank on the IoM... this is the obvious lesson.
Innocents amongst us need to learn this lesson. Foreigners have no recourse to the law on the IoM..

The honest (and how many were there?) had a problem... the corrupt outnumbered the honest.

What a tribute to the IoM. What a smell comes frpm the IoM.. We had people hiding. No names!! Why not? What did they have to hide? Between them and the IoM there was collusion. In Spanish there is a refran.... if you don't complain by default you agree. We seem to have suffered this fate... that is honest..

I see that there are few honest....... hello Adriennne... yes you Adrienne and your SA money, I think that the corrupt were caught out and the innocent paid. And that includes you???????????????????????????????????

Ask. Why bank on the IoM? Well that argument is pennies unless you are breaking the law.
The IoM is an island for the morally corrupt. And the world is full of morally corrupt people. Let the Iom eat you.

I repeat that: Foreigners seem to have no recourse to the the law on the IoM.

Only idiots and criminals invest in the IoM. But who is reading this?

Let's see some google searches.


IOM corrupt or innocent?

  • conned
  • 13/10/08 n/a (free)
  • a depositor
  • Offline
  • Tue, 13/04/2010 - 07:31

I am reading it. Stop being angry. You will make yourself ill. I know I am not starving while some others are in a worse predicament than me so it is easy to say, 'it is all right for you.' but you name it, I have been there and survived. THE WHOLE WORLD IS CORRUPT, AND ALWAYS HAS BEEN, I think you have to accept that.


Why stop being angry?

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
  • Offline
  • Sun, 18/04/2010 - 07:37

With your logic what were you arguing about?
I ascribe to reason and justice. I don't make make exceptions for the greedy incompetent bastards on the IoM.
Tell me again! Why am I mistaken?


No, the opera singing director of KSFIoM is nailed to the wall.

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
  • Offline
  • Tue, 13/04/2010 - 08:28

It is that simple -conned- . I f I meet the bastard.. I can-t answer for my response.

Now he thinks we are not going to meet. We will see.

I have been here before.

Why should the lying incompetent bastard get away scot free?


Iceland lifts the lid

  • arny
  • 15/10/08 31/05/09
  • unspecified
  • Offline
  • Tue, 13/04/2010 - 05:20

Another article in the Daily Telegraph. A good chance of an enquiry after the election methinks.


BBC Online

  • arny
  • 15/10/08 31/05/09
  • unspecified
  • Offline
  • Tue, 13/04/2010 - 05:16

B of E knew Iceland was in trouble


Yes it did.

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
  • Offline
  • Sun, 18/04/2010 - 07:40

What is simpler than this?


Of course it did.

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
  • Offline
  • Tue, 13/04/2010 - 05:52

They stuck their finger in the wind and hoped that everything would work out.

They were wrong were they not?

And how much did we pay these plonkers, or rather how much did they make shorting the situation?

I think the level of cynicism is approaching the appropriate level.

We were screwed (not to put too finer point on it).

The disgusting thing is the response of the IoMG. I'll leave you to fill in the dashes. ----- --- -------


Bank of England

  • Done like a Kipper
  • 10/10/08 n/a (free)
  • a depositor
  • Offline
  • Tue, 13/04/2010 - 02:13

Daily Telegraph

  • arny
  • 15/10/08 31/05/09
  • unspecified
  • Offline
  • Mon, 12/04/2010 - 19:30

article by our friend Rowena Mason


Baugar being sued by a bank

  • arny
  • 15/10/08 31/05/09
  • unspecified
  • Offline
  • Sun, 11/04/2010 - 12:38

article in today's Times


From The Times

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Tue, 13/04/2010 - 06:04

Iceland crisis: A report into Iceland’s 2008 banking collapse charges that Geir Haarde, the Nordic nation’s former prime minister, and David Oddsson, central bank chief, acted with “gross negligence” in allowing the financial sector to overheat without adequate oversight. Pall Hreinsson, the supreme court judge appointed to head the Special Investigation Commission, singled out seven former officials including these two for particular criticism.


Link to Times article 11-04-2010

  • expatvictim
  • 10/10/08 01/11/10
  • a depositor
  • Offline
  • Sun, 11/04/2010 - 16:45

Link to Arny's article

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_...

Not much in it for us other than to reinforce that a bunch of (alleged) crooks were allowed to take over the British high street backed by dubious lending practices.