Neither the Icelandic Minister of Finance nor the Minister of Trade was aware of the problems facing Icesave, a daughter company of Landsbanki Bank, MBL.is reports.
The head of the country’s Financial Supervisory Authority said at the weekend that Bjorgvin G. Sigurdsson, Minister of Trade was not informed about the issue this spring, as some have suggested.
Arni M. Mathiesen, Finance Minister said that the bank’s troubles had been discussed for some time; but that he had absolutely no idea that Landsbanki’s Icesave troubles would need such radical action before the beginning of September.
When asked if it was ill-advised to allow Landsbanki to start up Icesave services in the Netherlands in May in light of the parent company’s difficulties, he says he had not followed how the matter had evolved, and did not know who took the decision. The decision, he says, did not fall on him to make.
‘ignorance is no excuse in the law’. Where were the people that control banking activities while banks were speculating with tens of billions of $? The Icelandic government is trying to separate themselves from the banking system, thus their responsibility,to people who trusted-and got ripped off!- by their financial system. I think the Icelandic people are basically good, hard working people, except for a few greedy bankers that have destroyed Icelands reputation for the next 50 years or so.
My my, what slippery shoulders these Icelandic politicos all have. It would seem an Icelandic guarantee or promise is as good as the toilet paper its written on.
Either they are extremely naive and haven’t got a clue about the most basic economic facts in their own country or they are lying – in either case, I’d be very scared if this bunch constitutes my government. In either case these people shouldn’t be in government. How can they not have known what was going on? Does anyone believe a word of this?
The Icelandic government is claiming that they are innocent. This financial rip off, in their words (which are lies!) ”was caused by private companies, ie banks, and we as the government had no idea what was going on, so we have no liability”. I assume the government had some sort of system to monitor the banking system? If not, is the Icelandic government mentally handicapped? Also, I wonder when the ISK will finally have a set rate against the Euro?
This is truly frightening – Icelands village idiots overseeing scammers trading in substantive world markets. Maybe I would have been better off responding to the Nigerian email telling me that a rich relative had died and that a sum of money would release the estate.
@stan,
ISK has set rate against the euro, and that seems to be the problem, because it is ridiculously overvalued.
The question is, when they will allow free trading (floating) of the ISK.
You ain’t seen nothin’ yet! According to the Bank for International Settlements, German banks are holding $21, yes $21, billion in defaulted bonds of the Icelandic banks. That chicken will eventually come home to roost, and it makes the $4.5 billion defaulted to Britain look like chump change. Who says Iceland will be welcome in the EU, or that only the UK and the Netherlands have a bone to pick with Iceland? More shoes are falling …
No wonder the IMF is taking its time with the loan – I should think they have little confidence in the ability of the Icelandic government to run a hot dog stand, never mind run a national economy and supervise a banking and financial system if this article is true.
@ Terry, Nice one I like your sense of humour.
@ Sumoi, Really is that true ? I have not heard a word of that hear ! But the Germans really do like this place, so maybe they will do a deal for their natives to visit here even cheaper ?
I am beginning to wonder how Iceland managed to run its international banking for all the years it did, with this unprofessional and childish approach.
I thought my country Thailand had a joke political system, with children and morons running the counry, but Iceland is indeed close. Still, it would be unfair of me to say Iceland is as bad as Thailand – no country can be.
@suomi
$21Bn !!! Incredible. I think you’re right, Iceland is going to get a good spanking. Surely there must be jail time somewhere for either some of the bankers or some of the politicians that have overseen this mass fraud. That said last time i was in Iceland i gathered prisoners are freed over the weekend so i’m not sure how effective a deterrent that is. Maybe a regular dunking in the Atlantic at 3am in the morning might do the trick.
21 bn – yes, it’s true, unfortuantely. Yet, amazingly, neither the German public nor the German government seem to be very interested in this. I suspect after all the x000 bn bailouts in Europe (Britain, France, Germany, Austria &c.), 21 bn just does not sound dramatic enough to be interesting for politicians or the media. Yet dramatic it is!
And it’s all the more scandalous because the German secretary of state for business, trade and economy Michel Glos (his main qualification for this jobs being his grey hair) reiterates that the customers of Kaupthing Edge have to blame themselves, because putting your money into Icelandic banks meant taking high risks. Yet Glos himself is qua office member of the supervisory board of the completely helpless kfw that lost millions in Iceland. Interestingly, most of the other Icelandic money seems to have been lost by former German state banks like Bayern LB. These banks now need to turn to the Government for help.
@Peter (Germany)
WOW! That attitude from the Glos is simply amazing. I can’t believe someone like that can possibly confuse risk taking with shares with supposedly safe depositing in a registered bank. That beggar belief. People need to inform him that he is in dereliction of duty to the German people.
“the German secretary of state for business, trade and economy Michel Glos (his main qualification for this jobs being his grey hair)”
Yeah, right, sadly. Damn, I should have applied for that job! At least I once studied economics. Glos, on the other hand, only has professional knowledge about milling. That’s as if the Icelanders would give an important official position, requiring profound economic knowledge, to, say, a fish expert!
Oh, wait…
Damn, the similarity!
BC 123a said ”The question is, when they will allow free trading (floating) of the ISK.—–My question is= Will the IMF require Iceland to float the ISK BEFORE they(the IMF) loans Iceland money(real money, Euros!)?
@stan,
as I understood, they want the fixed schedule when ISK will be refloated, before they give loans. They although do not demand that that happens before loans, just a set date, when it will.
Iceland government is again playing domestic politics here, hoping to get loans and have fairytale exchage rate at the same time.