Britain may be ready to compromise with Iceland to find a suitable Icesave deal, the Financial Times reports.
According to the newspaper, British Chancellor Alistair Darling has authorised British negotiators to soften the terms of repayment.
Darling reiterated that British taxpayers must still be reimbursed for the failed savings accounts, but indicated that a lower interest rate deal could be reached, or an interest-free period could apply to the loan, which is not due to start being repaid for seven years, but which is already accruing interest charges.
Here comes the wave of Daily Mail reader comments>>>>
“One possible concession is an “interest holiday” for part of the grace period. Another is allowing a floating rate of interest for part of the repayment period. While Mr Darling’s team insist both options still lead to the debts being fully recouped, the amendments are likely to reduce the ultimate return to the Treasury – a big concession Mr Darling had previously strongly resisted, claiming that the deal was fair.”
A floating rate of interest seems logical, if its was identical to the UK governments own rate (and ignoring icelands currently terrible risk premium of 6.25%) it would be fair. Its at 4.5% at present (I think, although I presume thats not indexed).
Its a big gamble though, if the UK’s borrowing costs go up Iceland could end up with far higher than 5.5%.
I hope they can make an agreement quickly. No, I don’t read the Daily Wail.
And I can imagine Sky News head line..
” Icelandic thieves escape paying back money stolen from UK. Insane negotiator Darling locked up in Broadmoor. “
Fisy
“Insane negotiator Darling locked up in Broadmoor.”
I puzzled over this… why would you call someone insane when he is apparently offering concessions that would be good for Iceland. Then it clicked, this would be a disaster for your petty little party if the current government pulled this off, wouldn’t it?
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article7032886.ece
You will not read about this in Iceland – Senior Civil Servant warned government not to lend monet to Iceland. He said it was beneficial for UK and not likely to be repaid. UK Govt. said it had written undertaking from iceland to repay.
That should read not benefical!
Icesave III
http://uk.reuters.com/article/idUKTRE61I3IL20100219?pageNumber=1&virtualBrandChannel=0
The source described it as “an offer they can’t refuse,”
i find that hard to believe, this deal is probably worse than the first two.
http://m5.is/?gluggi=frett&id=104595
This just shows that Darling and Brown listen to no one, if some one is wondering why Britain is ruined..
http://m5.is/?gluggi=frett&id=104595
Fisy says:
>And I can imagine Sky News head line..
>
>” Icelandic thieves escape paying back money stolen from UK. Insane negotiator Darling locked up in Broadmoor. “
Peter London replied without hint of irony :
>I puzzled over this… why would you call someone insane when he is apparently
>offering concessions that would be good for Iceland.
I wouldt call some one insame for finally coming down to earth and offering reasonable ” deal ” to Icelandic people.
But the whole point is that Sky News+ and poster like you would.
And you just confirmed every thing I knew was true about you there Peter from all you sabre rattling and articulate but misleading posts full of drivel you have ever made here.
>Then it clicked, this would
>be a disaster for your petty little party if the current government pulled this off,
>wouldn’t it?
Exactly what you getting at it not clear, it just went right over my head.
+http://www.icenews.is/index.php/2010/01/05/icesave-agreement-rejected-by-icelandic-president/#comment-108654
>http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article7032886.ece
james I think you miss the important points of the article.
“The Chancellor replied by letter the same day [ October 8th 2008 ], writing that he would lend the funds: “In coming to this decision I have taken into account the serious crisis of confidence among banks and their customers.””
Darling as it says in the article did this because UK banking system was at collapse+ and that nothing to do with Icelanders ( and was the reason for all this unilateral actions of Darling and Brown from October onwards – for example in guaranteeing the IceSave branch completely that he pulled out of his hat. )
“Britain was ‘three hours from going bust’
.. “on Friday, 10 October the [ UK ] was ‘very close’ to a complete banking collapse after ‘major depositors’ attempted to withdraw their money en masse.” :
http://www.icenews.is/index.php/2010/01/05/icesave-agreement-rejected-by-icelandic-president/#comment-108749
http://www.icenews.is/index.php/2009/12/19/majority-in-iceland-want-to-reject-icesave-bill/#comment-106692
UK is in bad shape thanks to the Brown years and this just gives more insight into how badly Darling has acted to try and clean up after the Brown years of bailout and bust started when Brown was Chancellor ( Treausury Secretary ) starting with his 1998 budget.
After Ireland did guarantee their deposits unlimited and to EUR 100,000 earlier then it was a mad scramble to the bottom to try and match them to avoid all the money flowing out of UK, Dutch banks, etc into Irish ones.
All hell did break lose and Darling and Brown did find convienient scapegoat to attack in Iceland and our banks at that time, including taking Kauthpgin Singer and Friedlander for no good reason.
The source described it as “an offer they can’t refuse,”
http://www.youtube.com/watch?v=JrLemLlBloY
All hell did break lose and Darling and Brown did find convienient scapegoat to attack in Iceland and our banks at that time, including taking Kauthpgin Singer and Friedlander for no good reason.
Are you insane? Why would the UK “attack” Icelandic banks and weaken them when its system was teetering on the brink?
Still waiting for your response to the Kaupthing review. As I keep saying, and you keep not refuting, there was a good reason.
Exactly what you getting at it not clear, it just went right over my head.
That is not true.
” Darling and Brown did find convienient scapegoat to attack in Iceland. ”
Brumley wrote ( is it really you ? ):
>Why would the UK “attack” Icelandic banks and weaken them when its system was teetering on the brink?
Making the attacks in the media that Darling and Brown did against Iceland was to distract away from they own troubles with they own banks at home, and the ” country run ” ( as in run on most major banks in UK ).
It is obvious why all this was done now facts came out over the last year — Iceland and IceSave and taking Kauthpgin Singer and Friedlander did make a good distraction from the real problems of UK in that time.
This thread details specific lies that Brown has said about Iceland in media :
http://www.icenews.is/index.php/2009/07/29/more-members-of-parliament-against-the-icesave-deal/#comment-89416
It will be interesting see what floating rate is given. Peter London did not say where he did get his 4.5 % figure from.
In older thread last we talked about rate FCSC gets :
http://www.icenews.is/index.php/2010/01/06/iceland-president’s-icesave-decision-drawing-harsh-international-response/#comment-109451
+http://www.fscs.org.uk/industry/funding/ i.e. the UK Financial Services Compensation Scheme ( FCSC) like Icelandic TIF does not have funds sufficient for its obligations either so it also has been given a loan by UK Treasury at 12 month LIBOR for GBP plus 30 additional basic points, i.e. for now that is just over 1.5 percent interest.
BUT most important issue is ” Ragnar Hall issue “. I assume it will be corrected:
http://www.slideshare.net/hjalli/the-icesave-dispute-priorities-and-division-of-claims
But this counter offering is very positive and it is good that now Darling and Bous ( before his party did leave the Dutch government ) seem to be now back on solid earth again after our jelly fish EU at any cost Red-Green government was forced to actually negotiate by InDefense.
http://www.icenews.is/index.php/2010/02/22/icelandic-politicians-mull-over-new-icesave-plan/
Ah, I see the problem that you’re having Fisy. As you refuse to address the Kaupthing loss in that legal review, you’re still operating under the assumption that Kaupthing was saveable. It wasn’t and, even if Landsbanki hadn’t closed it’s doors, thus creating a total loss of confidence in brand Iceland, Kaupthing was going to have trouble meeting the FSA demands.
Any political capital that Labour may have made from the Icelandic situation was a bonus. As I said, you can’t seriously be suggesting that the government would deliberately move against Icelandic banks unless such a move increased the stability of the UK banking system. Closing down a perfectly good bank is not something that they’d risk, which is why they (1) moved against a bank that had shut out UK, but not Icelandic, customers and (2) a bank that the FSA thought was in deep trouble.
In the dutch media they say that the offer is a rate of Euribor + 2,75% and no interest for the first two years. Apparently the rate of Euribor + 2,75% is the same as the rate that the scandinavian countries offered for their loan. So, I guess if that interest is still too high, Iceland will also say no thanks to the scandinavian loan? Or why would UK and Dutch accept any lower interest than scandinavians?
Fisy,
I agree with Bromley on this one. There have been extensive discussions between nordic analyst Mike and Bjarni about the question if Kaupthing could have been saved.
The outcome was that Mike showed that Kaupthing was not too different from Glitnir and Landsbankki and would have collapsed too.