Icelandic society is broadly split into three camps at the moment. There are those who blame the current financial crisis on the government’s irresponsible, almost total, liberalisation of the banking sector. Then there are those who blame the bankers for unnecessarily abusing the freedom given to them. The other group are the less discriminatory ones who blame everyone.
Last week’s interviews from billionaire father and son tycoons Bjorgolfur Gudmundsson and Bjorgolfur Thor Bjorgolfsson therefore created a lot of debate in Iceland and elsewhere.
The businessmen many are blaming for the country’s problems did not earn any respect for staying silent as long as they did. But when they finally spoke, their words were so calm, reasonable and seemingly honest, that they won back some of their lost respect.
Of course, sceptics quite reasonably argue that a silver-tongued billionaire’s self defence means nothing unless supported by thousands of files made public.
Whoever turns out to be right, and whether or not it even matters, Bjorgolfur Thor Bjorgolfsson’s comments on Russia were rather eloquent and thought-provoking.
Bjorgolfur Thor Bjorgolfsson was a major shareholder in Landsbanki and the chairman of both Straumur investment bank and Actavis. His father, Bjorgolfur Gudmundsson was Landsbanki’s majority owner and chairman.
After graduating university in the USA, Bjorgolfsson went to Russia where he started up the Bravo Brewery which was eventually sold to Heineken for USD 400 million and spring boarded the entrepreneur on his course to the financial big league.
Bjorgolfsson was very much active in Russia at the time of the economic collapse there in the 90s; and he believes Iceland can now learn from Russia’s economic recovery. It is an ironic twist that Iceland is still negotiating a possible large loan from Russia to help it avert catastrophe.
“I have experienced exactly this kind of crisis myself. In ´98 I was in Russia when the PM appeared on TV on a Monday saying that Russia was unable to pay its debts as a nation and the country collapsed,” Bjorgolfsson says. “Total chaos ensued for a whole year and it took several years for Russia to work its way out of this. There I was on the ground, friends, colleagues and others, credit cards didn‘t function, the rouble dropped like a brick. The exact same thing happened as in Iceland, except in a harsher way. I was at the scene, I had a job, I was able to work myself out of it, the Russians were able to work their way out of it, and Iceland will do the same. I have seen this before.”
Well said Bjorgolfur
finaly some positive talk that poeple need to start listening to, time to switch off the news and start getting back to the true Icelandic spirit, Even though im not a native i lived there for 20 years and i really love the Icelanders way of thinking, Iceland can become so much stronger in the near future and can teach the world many things
I think, this gentleman forgets some things:
Russia is biggest country, with inexhaustible natural resources, whose terrible crisis correct enormous oil sales and natural wealth. Does Iceland have those natural resources? Does Iceland have crude to secure enormous dollars, euro, pound, yen amounts? Does Iceland have decisions, influences in any corner of the world? I think, this gentleman forgets many things: much money changed his head!
By the way, wild things comes with dramatic days: Icelanders lives days of darkness because wild decisions.
You must be joking.
First of all Icelanders reaction are not unique in the world. Indeed, right now, politicians are trying to set a world meeting about the financial crisis. Sarkozy was the pioneer of this, and for the first time in history we will have Chinese authorities giving their thoughts with helpless westernized capitalism.
Second, Russia development was due in big part by legitimate mafia, which, own today’s most part of energy resources. Bjorgolfsson, outside of Iceland, is known to be a poppet. Many Medias (Reuters, Le Monde) comment on his business relations with unclear organizations to clean some suspected money. The future will say.
Third, I saw this interview, and you can’t possibly think or believe that a business man isn’t trying to simply sale you another product. Of course he was calm and explaining is way out, that’s job!
I say lets leave it to the Justice and international organizations to decide the true in this.
Well the Americans aren’t doing so well either. They are already looking at ‘Stimulus-2?. AIG is also going threw the bailout they recieved and may be at the door of the taxpayer again in the near future. Considering the problem started with them and spread around the world Iceland may do better then them. What Gorden Brown did was also uncalled for and did do a lot of damage.
Now if I remember correctly a lot of the problems that happened in Russia, were also caused by US Capitalistic ideas. Then again many problems around the world are directly linked to the US. Capitalism implodes on itself time and time again. Not a very efficient way of doing things I am afraid.
>>What Gorden Brown did was also uncalled for and did do a lot of damage.
What he did was quite legitimately and legally stopped Icelandic banks from operating in the UK. Those banks don’t even have 15% assets to cover their debts and were unable to roll on their borrowing because the international banking system had them classified as bankrupt.
Brown isn’t doing too well with his seize and sell for scrap methods.
On Bradford & Bingley “The gov. has confiscated 1.5 billion pounds in assets”
but doesn’t actually know what small % will be realised.
“with many of the one million B&B mortgages left with the Treasury. As a result, taxpayers are likely to be left holding the mortgages most likely to default from the £40 billion portfolio”
“The Bradford and Bingley mortgage book is a lower quality book of mortgages, it is a worse asset than Northern Rock,” said Charlie Parker, of Citywire.
The Government will have to pump more capital into Northern Rock and Bradford Bingley to reflect worsening conditions in the housing market senior bankers believe.
Add in to the mix.
HBOS takes a £5.2bn hit