Despite my harsh criticism of Icelandic FME ( FSA ) about not responding to systemic risk — Landsbanki was careful to keep within all the ratios, etc.

You should read Chapter 3. of Kaarlo Jännäri report as linked to here ( The Kaarlo Jännäri Report on Banking Regulation and Supervision in Iceland Recommendations and Conclusions March 30 2009 ) :

http://www.icenews.is/index.php/2009/07/01/iceland-icesave-deal-“there-is-no-plan-b”/comment-page-1/#comment-84412

It is one that will challenge you very forcefull assertions that you make in this regard of “do what it wanted to the banks”.

That Landsbanki did make a branch and not a subsidiary is the problem at the core. Under EU law they could NOT BE STOPPED from doing so. You do understand that I hope.

A slight correction. Under EU law they could not be stopped by foreign governments/regulators. The Icelandic government could do what it wanted to the banks.

Yes they do.

And UK High Court agrees in granting the judiciual review.

It was blind panic at best by Brown Darling. But I know they are going to come out of this looking far worse..

On Jun 23, 2009, steveservaes said:
>Peter.. I would also query your comment that the UK bank was insolvent due to the fault of the parent ”

Peter is on some kind of propoganda mission, so it is wise to use critical mind when listening to him in particular.

He only posts when facts that are unflattering to Brown and Darling are being disucsed. When he says garbage and other ad hominem you know you’ve hit a nerve.

If you listen to Geir speech he tells of more facts that are damning regarding Brown Darling and Kaupthing case and I’m surprised others here haven’t picked up on it.

Look starting at 24:16 in the YouTube.

( It shows how you cant trust even IceNews to understand the real important things being said and have to do your own research. )

On the fateful week Tuesday he reveals that Kautphing was paid the loan of EUR 500 million for 4 days to bridge its short term gap in financing. (from Icelandic Central Bank.)

This loan given on the Tuesday and to be repaid on the Friday.

Darling and Brown intervened on the Wednesday and took Kaupthing Singer and Frieldnader despite the fact that this money was on its way ( and other monies too ).

Collateral was a bank FIH Erhvervsbank A/S in Denmark, which the Central Bank of Iceland owns now because the loan was NOT repaid by Kaupthing.

I will let the more sensible people here think about what this fact means in the whole narrative of what happened to Kaupthing Singer and Friedlander.

One thing that the FSA in Isle of Man complain about bitterly was that unlike Bradford and Bingley problem in UK they never received warning from UK FSA about Kaupthing Singer and Friedlander.

The most obvious reason is that UK FSA did not decide until the DAY that Kaupthing Singer and Frieldmabder needed to be taken down. Because it was not insolvent. It was a political decision by Brown Darling to take it. Not one based on actual insolvancy.

Darling and Brown decided that they did not want Kauthpging Singer and Friedlander ( a UK bank) to survive so that they would crush other news in the UK media about own UK owned banks.

And also to make for sure there was no way that Kaupthing Singer and Friedlander could be part of the UK bank bailout scheme.

And as part of this they got a nice GBP 550 million or so of UK people money from Isle of Man as part of it. This was a side effect they had not expected in they opportunism but comes as a nice bonus to them.

The EU regulations MUST be taken by Iceland into local law under the EEA agreement as has to be done by the EU memberstate in order to do its financial cooperation and operating in it.

So in that sense, yes the EU burecrats are responsible for making this flawed law about freedom of establishment though branches. It WAS forced on Iceland in the same way it was forced on EU memberstate UK and Holland.

That IS the fault of the EU commission that made this law — this EU Directives.

Therefore it is difficult for them to have any high ground — the EU commission — in trying to stop a request for impertial 3rd party to rule on IceSave case.

That Landsbanki did make a branch and not a subsidiary is the problem at the core. Under EU law they could NOT BE STOPPED from doing so. You do understand that I hope.

Should Landsbanki have been making this as a branch? No. But they directors could not be told to stop because that is against the EU law. And Icelanders did not make this law, nor the UK, nor Holland. EU commission burecrats did.

Holland is gentlemanly in this case but still this is general principle at stake here. In case of UK its govenrment show bad faith. In each case as we see by the deal trying to get Iceland to sign they have direct financial interest in trying to limit liability and get best for they tax payer.

Even if as I expect Landsbanki assets cover this over time still we have they interest to pay and it is fair to get this EU directive ruled on because if things go wrong Icelandic taxpayer is on the hook when they should not be because of this crisis.

That Icelanders do pay there debts is not the point of that at all. Of course they do that.

It is the fact that no one inside the case should be allowed to judge it. Of course EU commission does not want to look like fools and have this bad publicity. So they rather that Icelandic taxpayer be on the hook. Which is not acceptable in any way looking at this matter.

It is unreasonable and against due process of justice. And typical of EU burecrats.

Of all the EU regulations we have — this 6.5% under — it is nearly all this financial ones — and look at how bad they have been. Does EU really except us to take more by joining EU and all that costs — until it shows that when there is a problem that EU commission will be honest and let a judge review it and so that innocent people are not damaged and equity can happen.

No one infallible and why would EU commission NOT want to show that they are reasonable people that will learn from the mistakes and correct them fairly ?

>Yes, of course, it was the EU’s fault that allowed a Icelandic regulated bank to by >pass the UK regulator and borrow even more money from depositors.
>Its not the Iceland fault for vastly over borrowing, against all European advice, its >the EU’s fault for ALLOWING ICELAND TO BE STUPID.
>Silly me for thinking that Iceland was a sovereign nation with an iota of sense.

It is the Icelandic regulator FME repsponsiblty to be on top of this kind of systemic risk. But they werent.

Not on the problems that were warned about by Davið and his colleagues in public monetrary reports of the Central Bank about the risks if the markets closed.

No one expected this crisis to get so bad so fast as all bankers in world were always expecting Federal reserve and Treasury to bailout its insolvent banks.

When Lehmans was allowed to fail it sent shock wave around banking world — for first time they would actually have to assess risks of lending to other banks without the idea that they could cry to the US government to bail them out with taxpaer money.

This of couese meant the US banks found because they had been doing all this reckless buying and lending related to the mortgage backed securities they could NOT know and trust to lend to their other big banks. And the same for European banks.

Despite that Icelandic banks look okay in assets they come very low in foodchain in rolling over they loans and that is what happen to Glitnir then Landsbanki then Kaupthing during the fate full time end of Sept to early Oct.

So here we have an example of a systemic shock and disruption of lending between banks inside the EU and form banks outside the EU into the EU.

There fore this changes the situation of the EU Directive 94/19/EC from being clear cut — if things were normal then of course Iceland would do what a responsible govenrment would do and back the deposit fund. But now things have not been so clear cut because this was a crisis added to by the digusting behavior of Brown Darling towards Landsbanki, Government and Central Bank of Iceland.

We were knocked over the head by Brown and Darling no wonder we want this in front of impartial judge. But of course EU commission has its reasons not to which Bjarni has bought out in some nice details in other threads.

I haven’t read it yet – looks like it’ll take a while to work through :).

http://www.icenews.is/index.php/2009/06/21/protests-in-iceland/comment-page-1/#comment-82768