Iceland’s minister for trade, Gylfi Magnusson, says the cautionary words from the CEO of Fitch Ratings about the Icelandic Supreme Court’s ruling that foreign currency loans are illegal do not come as a surprise. Magnusson says the uncertainty surrounding how such loans will be dealt with now is unsettling.
Fitch’s CEO told Bloomberg that the Supreme Court decision on the illegality of foreign currency indexed loans will likely reduce the stability of the Icelandic financial system again and delay recovery.
He also says the judgement could damage Iceland’s access to international markets – especially if the new Icelandic banks’ owners who are creditors to the old banks decide to go to court against the government over the issue. Iceland could have difficulty accessing foreign credit, he says.
Gylfi Magnusson told RUV the news from Fitch does not come as a surprise; but added that the court’s decision on foreign loans is not as worrying as Fitch makes out and said that the company paints a particularly dark picture of the situation.
>the uncertainty surrounding how such loans will be dealt with now is unsettling.
It is way that the current government has handle the announcement that is the problem.
In they ( unfortunately ) now common fashion our Red-Green government just looked like they were in some meeting about the EU member ship application and EU assistance for adding all those new EU commission regulations they want for Iceland, instead of looking to important matters at home.
http://www.icenews.is/index.php/2010/07/01/cbi-and-fme-announce-new-iceland-foreign-currency-loan-interest-rules/#comment-197428
http://www.jondan.org/2010/06/a-whiff-of-bananas/
” Here is a partial list of questions questions the government should have answered on the day of the Supreme Court decision [ 16 June 2010 ]:
1. What does this mean for the split of the fallen banks into “new” and “old” banks?
2. will this derail the sale/transfer of the “new” banks to the creditors?
did the creditors and now owners of the “new” banks do due diligence?
3. will the government have to re-capitalize the “new” banks (at least Landsbanki) and can it afford it?
4. Are the “new” banks in danger of failure?
Impact on borrowers
5. Who exactly is affected? (the verdict was only about car loans)
6. What is the interest rate that should have been payed and will be payed on those loans?
7. How to deal with the next loan payment?
8. How will the those who have payed too much be compensated?
9. Will those who benefited before the crisis have to reimburse the lenders?
10. How does this affect the IMF program? ”
Now I suppose we will be finding out the hard way.
This list the three main issues of uncertainty facing Icelandic currency and economy :
http://www.icenews.is/index.php/2010/07/06/icelandic-krona-appears-to-be-doing-well/#comment-200421
( It is true that this matter was to be decided in courts as in case for the complex disputes but the Icelandic government ministers are ones meant to talk to the world about the results and anticipate.
Their way of handling this is as good as nothing. Worse than nothing. And it adds to their horrible track record since April 2009. )
Here one of the leasing companies has put in a test case for ruling since Central bank announced interim idea :
http://www.icenews.is/index.php/2010/07/08/test-case-for-new-iceland-foreign-currency-car-loan-ruling/
“not as worrying as Fitch makes out and said that the company paints a particularly dark picture of the situation”.
Wow!! what an Idiot!!!
As written before on this site and will state again: The U.S. gov’t will ensure that the Icelandic currency remains stable. A high level economic meeting in January 2010 and appointment of PhD economist as U.S. ambassador to Iceland in March ? 2010 etc are all indications of U.S. Treasury standing behind Iceland. The magic of politicians and “pulling rabbits out of hats” is all it will take to make the final transition from failed banks to stable krona.
Remember what Franklin Roosevelt said, “The only thing we have to fear is money itself.”
Patience!
Well, assuming it was you, last time you posted I pointed out that there wasn’t a US ambassador. Although we’re closer to it now, guess what it still says on the US Iceland embassy website?
“There is no US Ambassador to Iceland at this time.”
http://iceland.usembassy.gov/ambassador.html
So I think you need to come up with somthing a little more tangible to support your belief. Some real, physical action of the US to support the ISK would be a good start. Failing that, at least a conspiracy theory with a bit more bite.