Comments on: Former minister to BBC: Iceland being blackmailed over Icesave

By: Leo

Leo — Thu, 03 Jun 2010 08:38:00 +0000

Palli, you are incorrect. While these were private companies, the Icelandic state through the deposit guarantee scheme guaranteed that depositors would be repaid in case of insolvency of the banks (up to the 20k euro). That guarantee by the Icelandic government was an absolute requirement before Icesave was allowed to operate in the UK and NL. So they entered those markets based on that guarantee by the Icelandic state through its deposit guarantee scheme. Its very improper, if not criminal for Iceland now not to honour that guarantee. If you wanted to protest this, you should have done so when Iceland setup the guarantee scheme (which is required by EEA regulations) and took on the liabilities for those ‘private’ banks on behalf of the Icelandic taxpayer. But you probably didn’t pay attention then (I bet noone in Europe paid attention), but that is no excuse I’m afraid. Iceland entered the EEA willingly and accepted the fact that the banks were guaranteed willingly. You can’t go around having regrets about that 10 years later and expect other countries to let you get away with not paying your guarantees.

And yes, it was a guarantee effectively by the Icelandic state, as addressed by the recent EFTA decision they handed out last week.

By: mba university

mba university — Wed, 02 Jun 2010 20:32:04 +0000

These where not Icelandic state companies, these banks where private and those who screwed everyone are on the run. The shareholders bailed out.

By: Palli Weldingh

Palli Weldingh — Thu, 07 Jan 2010 02:59:34 +0000

I have a hard time getting this ! how come ewery one is claiming from me to pay for private companies that fail ???
This where not Icelandic state companies, these banks where private and those who screwed eweru one are still on the run ????
this is not between the folks of England, Holland and Iceland, this is private among shareholders !!! let´s get that in the open and clear !!!!

By: Bromley86

Bromley86 — Tue, 06 Oct 2009 11:34:52 +0000

>Tell them to take a hike and get a life.

Cool. Then, with that reasoning, you’ll have no problem with the UK/NL response (namely applying pressure via the IMF/EU).

By: anon

anon — Tue, 06 Oct 2009 09:00:48 +0000

it sounds like iceland is getting shaken down by UK and Netherlands for deposits which weren’t guaranteed. Screw it, UK and Netherlands put deposits in high-risk accounts and lost. it’s their loss, not Iceland’s. Tell them to take a hike and get a life.

By: Alexander E.

Alexander E. — Mon, 05 Oct 2009 01:13:41 +0000

Peter – London said:

The IMF money is coming from the EU’s coffers

Then it would be EUMF – EU Monetary Fund. But it’s called “International” for a reason, Peter. ;-)

By: Bjarni

Bjarni — Mon, 05 Oct 2009 00:27:35 +0000

To Rolf-Norway:

>>>>I have understood that the Dutch and the British are claiming that Iceland shall pay alsos for amounts higher than this limit. How can they, and if so what’s the point with the guarantee?

Its a bit complicated. First thing to realize, is that there are two separate processes going on here. The bankruptcy proceedings of Landsbanki and payments from the deposit guarantee funds.

The old Landsbanki is being dissolved, and priority claimants will be paid percentage of their claim from recovered assets. This is being done according to current Icelandic laws, which give priority to depositors. The current estimate is that priority claimants will get somewhere around 75%, which can of course change later.

The other process is the deposit guarantees, by Iceland, UK, and Netherlands. For Landsbanki, Iceland guaranteed 100% in ISK for domestic branches, but did not pay them out the actual money. According to IceSave agreement, Iceland also guarantees the first 21K for the foreign IceSave depositors. It is currently negotiating the loan terms with UK/Netherlands for this amount (total about 4B euros), since it did not have the foreign currency to pay them out directly.

UK guaranteed 100% for their domestic IceSave depositors and did pay out all the money (about 7B Euros), while Netherlands guaranteed 100K Euros for their domestic IceSave depositors and paid all of it out also (about 2B Euros).

The question then becomes, out of the Landsbanki bankruptcy proceedings, how much of the 75% should Iceland get for each depositor, and how much should UK/Netherlands get. According to Icelandic laws, each depositor case is treated separately, and then Icelandic deposit guarantee fund would get repaid the first 21K, and UK/Netherlands the rest.

UK/Netherlands didn’t like this and negotiated that in this case Icelandic deposit guarantee fund would have to pay the difference so their funds would get equal share. This was placed in a secret agreement called Settlement Agreement that only became public late in the summer. This extra payment will likely cause Iceland to have to pay approx. extra 1B Euros on top of the 21K guarantee, assuming the 75% recovery rate.

This was one of the critical points, that caused the Icelandic parliament to add the amendments. They therefore include the clause, among other things, that the bankruptcy payments have to be done according to Icelandic laws.

Needless to say, UK/Netherlands don’t like these amendments at all, and want to make sure Iceland still pays the difference.

By: Bromley86

Bromley86 — Sun, 04 Oct 2009 23:00:40 +0000

Incorrect Rolf. UK/NL claim is for the guarantee only.

By: Rolf -Norway

Rolf -Norway — Sun, 04 Oct 2009 22:05:58 +0000

As far as I know, there is a guarantee limit of EUR 22.800 for each depositor. I have understood that the Dutch and the British are claiming that Iceland shall pay alsos for amounts higher than this limit. How can they, and if so what’s the point with the guarantee?

By: Jim

Jim — Sun, 04 Oct 2009 19:07:24 +0000

Here is the BBC iPlayer link:
http://www.bbc.co.uk/iplayer/console/b00mvd4g

This link is valid for only another 5 days, so perhaps the interview will also be hosted elsewhere…