The latest 2 articles in The Telegraph

  • expat
  • 10/10/08 31/05/09
  • unspecified
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Posted: Sat, 22/08/2009 - 07:17

The former chief executive of Kaupthing has defended the business practices of the failed Icelandic bank, after its loan book was leaked on to the internet last month.

By Rowena Mason
Published: 9:13PM BST 20 Aug 2009
Hreidar Mar Sigurdsson, former co-chief executive, said loans to some of the bank's top shareholders did not need to be disclosed as related-party transactions.
"These loans were not given in the last days of the bank," said Mr Sigurdsson, who left after the bank failed. "We believed our loans were good, well secured loans." Kaupthing was the biggest of Iceland's three banks that collapsed last October, affecting thousands of British savers and many authorities.
Iceland: the boom years, growing doubts and the crisis
Iceland's prime minister Johanna Sigurdardottir, said Kaupthing's loans totalling more than €6bn (£5.2bn) to top shareholders were "if not illegal, completely unethical". Many were provided "without any guarantees or covenants".
But Mr Sigurdsson said the inter-relatedness of the Icelandic financial sector was "clearly one of the weaknesses of the system".
All three banks are under scrutiny by Iceland's special investigator, who is looking at more than 20 cases of "suspected criminal activity" in the sector.
"Mistakes were made," Mr Sigurdsson said. "I'm obliged to offer my apologies to the bank's shareholders, the bank's lenders and the bank's employees. I should have prepared the bank better for the storm that hit it."
Kaupthing's winding-up committee has hired PricewaterhouseCoopers to investigate the lender's transactions in the weeks before its collapse, placing particular focus on parties related to shareholders, managers and insiders.

celand faces legal action from 93pc of bank creditors
More than 90pc of 60 major European banks that lost money in the Icelandic bank collapse are considering legal action and would not be prepared to invest in the country again, according to a new report by Norton Rose.

By Rowena Mason
Published: 9:55PM BST 17 Aug 2009
Around 98pc of the financial institutions which responded to a survey believed the Icelandic government did not deal fairly with creditors.
Iceland's financial sector was decimated when its three biggest banks, Kaupthing, Landsbanki and Glitnir, collapsed last October.
Many institutional creditors were not happy that the Icelandic government put banks' foreign operations into administration, while using their assets to capitalise the domestic operations.
The government said last month that it would issue bonds worth 270bn Icelandic krona (£1.3bn) to three new banks, in which creditors of Kaupthing and Glitnir will be offered equity stakes in compensation for assets that were initially transferred away.
However, the survey shows that international creditors were still not satisfied with the deal that was offered to them. Three-quarters of those who responded believed that Iceland may have broken international law in its handling of the crisis that has seen its government toppled and an investigation into the banks begun.
The report also painted a bleak picture of Iceland's economic future, with nine-in-10 seeing no recovery for at least two years and three-quarters convinced that the Nordic nation is not ready to join the European Union.
"The survey sends a clear and unambiguous signal of the strength of discontent amongst the international creditor community," said Joseph Tirado, partner and head of international arbitration at Norton Rose.
"It is striking, if not surprising, that 93pc of respondents feel they have no alternative but to take legal action because of what they feel to be the Icelandic authorities' failure to engage meaningfully with them".

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Just thought I'd take a look

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Sat, 22/08/2009 - 16:12

Just thought I'd take a look at what HM Treasury had to say about KSF back in October last year, and this little gem, note para 2 and the comment about WHO REGULATES KSF and compare that to the comments made since by HM Treasury and the FSA:

08 October 2008

Kaupthing Singer & Friedlander

  1. Acting on the advice of the Bank and FSA, and in light of announcements made by the Icelandic authorities in recent days, the Chancellor has taken action today to protect the retail depositors in Kaupthing Singer & Friedlander, a UK-based banking subsidiary of Kaupthing Bank. He has taken this action to ensure the stability of the UK financial system. Savers’ money is safe and secure.

  2. Kaupthing Singer & Friedlander (KSF) is regulated by the FSA. The FSA has determined that Kaupthing Singer & Friedlander no longer meets its threshold conditions, and is likely to be unable to continue to meet its obligations to depositors. The FSA concluded that KSF is in default for the purposes of the Financial Services Compensation Scheme. The Treasury has used the Banking (Special Provisions) Act 2008 to ensure a resolution that preserves financial stability and provides protection and continuity of business for depositors.

  3. KSF’s Kaupthing Edge deposit business has been transferred to ING Direct, a wholly-owned subsidiary of ING Group, which operates through its branch in the UK. ING Direct is working to rapidly ensure that it is business as normal for all customers.

  4. This action by the Tripartite Authorities protects savers’ money and provides certainty for retail depositors. The transfer of the retail deposit books has been backed by cash from HM Treasury and the Financial Services Compensation Scheme.

  5. The remainder of Kaupthing Singer & Friedlander business has been put into administration. Any retail depositors eligible to claim under the Financial Services Compensation Scheme whose business has not been transferred to ING Direct will be paid out in full through the Financial Services Compensation Scheme.

  6. This is the right course of action to protect savers, ensure financial stability, and safeguard the interests of the taxpayer.

What dark secrets might there be on the IoM ?

  • Lucky Jim
  • 13/10/08 31/05/09
  • not a depositor
  • Offline
  • Sat, 22/08/2009 - 08:59

See HERE comment on previous article by Rowena Mason now published on