Statement Kaupthing Bank from Telegragh

  • shafted
  • 10/10/08 12/12/09
  • a depositor
  • Offline
Posted: Sun, 12/10/2008 - 10:42

Earlier, the chairman of Iceland’s biggest bank blamed Britain’s panicking savers for causing its collapse. Sigurdur Einarsson, the chairman of Kaupthing, believes that his bank’s British customers became muddled in the hysteria that followed the fall of Ice­save, the rival savings operation, and rushed to withdraw money from all Icelandic banks. The Icelandic government stepped in to nationalise Kaupthing on Thursday, only days after the collapse of the country’s third-biggest bank, Glitnir, and the second biggest, Landsbanki, the owner of Icesave. “People in the UK got Kaupthing, which was a very strong bank, mixed up with the problems of Landsbanki’s Icesave,” Mr Einarsson said. “You could say that this meant we had to turn to the Icelandic government, which led to its takeover.”

This probably gives a clue to the uk Gov stepping in and freezing the uk assets which helped to lead to the nationalisation.

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KSF Undermined?

  • VikingRaider
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Sun, 12/10/2008 - 12:24

There's a ring of truth in this argument, althtough Kaupthing's ballooning CDS (Credit Default Swap) rates were making me queasy in June. Nonetheless, Kaupthing obtained financing and was above board about the CDS problems. My research tends to point to a thing called Basel II and the EU Market Abuse Directive (MAD) as having interfered with the Bank of England's near-magical Overnight financing Facility (that involves huge amounts of money). Prior to Basel II and MAD, Threadneedle Street could untangle most problems overnight or during the weekend. However, the BoE had warned HMG that its 'quiet overnight fixes' would have to be declared to the EU under Basel II and MAD and the BoE was unwilling to jeopardise national security, hence Northern Rock followed by a chain of debacles.