The Icelandic Ministry of Internal Affairs has begun advertising the referendum which will take place on 9th April over the so-called Icesave law which Althingi passed on 16th February and the President decided to send to a public vote. Absentee voting starts on 16th March, Visir.is reported.
The question as it will stand on the ballot paper is:
Law number 13/2011 allows for the Minister of Finance to to confirm the contract which was inscribed in London on the 8th December 2010, on responsibility for the Depositor and Investors’ Protection Fund to re-pay the British and Dutch states for the cost of the minimum insurance amount to depositors in branches of Landsbanki Islands hf. in the United Kingdom and the Netherlands and the payment of the balance and interest on those obligations.
The law was passed by Althingi on the 16th February 2011 but the President of Iceland declined to pass it.
Should law number 13/2011 remain in force?
Possible answers are:
Yes, it should remain in force.
No, it should be repealed.
The Ministry of Internal Affairs’ website states that voting will take place at the same polling stations as are used in normal elections. “Municipalities will advertise more information on polling stations shortly before the referendum; for example when they open, where they are, how the wards will be divided, et cetera. Voters are asked to acquaint themselves thoroughly with this information. The right to vote in the national referendum is extended to all those with the right to vote in elections to Althingi,” the site says.
The Althingi website, althingi.is, has details on Icesave accessible by clicking the ‘Icesave’ button, the ministry statement adds. Voters can read the law as it was passed by parliament, all supporting documents and track its progress through parliament before 16th February.
More money wasted, the money to be spent on the referendum could be used to pay the Bond Holders.
Do you put to the vote before rates increase, fuel price increase and what salaries to pay politicians?
That is true democracy, try it out Mr. President.
I have gotta agree. It seems like a waste of time that referendum. Pass the bill and try to get rid of your debt once and for all.
>” It seems like a waste of time that referendum. Pass the bill and try to get rid of your debt once and for all. ”
If Irish and British people had had this also in their constitutiosns then maybe they would have less of the astronomical debts of slavery they have now.
We need MORE of this direct democracy not less.
We will demand from our useless politican the right of initiative like they do have in Swiss and Leischenstein.
And then they will HAVE to listen to us when we do put our names to an inititative and 5% of voter are authrnticated by our bank keys to support it.
Do you HEAR us useless poiticians in Althing — your times of making bad decisiosn for us are OVER.
We will have our rights to block your nonsense law, or get things we want listensed to tabled in parliament — whether you like it or NOT.
No more waiting until the next representative election of parlimanet. If 5% or more say so you WILL LISTEN.
j / anonymous wrote :
>the money to be spent on the referendum could be used to pay the Bond Holders.
With all respects to you and of course your family, it is not the Icelandic tax payer duty to pay for your losses.
This is not Ireland.
Icelandic tax payer are not going to be put on the hook for the losses of bond holders like Ireland.
http://www.vanityfair.com/business/features/2011/03/michael-lewis-ireland-201103
You did write :
” My family life savings was put into this bank through BCP Millenium in Portugal. We had a very stable financial base until we banked with BCP Millenium(Portugal) and Landsbanki. ”
” BCP Millenium (Portugal) verbaly guaranteed the bonds and explained that we would only loose money if Landsbanki or Kaupthing and BCP Millenium were to go bankrupt, which was very unlikely according to them. We never withdrew our money when the bonds were dropping in value because we believed in the “guarantee” that we woulkd get paid at the end of the term. ”
http://www.icenews.is/index.php/2010/12/06/icesave-draft-details-come-to-light/#comment-430076
Now, if you believe that fraud is involved then you should find a lawyer ( maybe pro- bono ) who will take your case and sue in court here or in Portugal.
http://www.icenews.is/index.php/2010/05/29/landsbanki-law-suit-could-see-icesave-payout-cut-to-30-percent/
” It is clear that if the Reykjavik District Court finds in favour of the claimants and forces the Landsbanki dissolution
committee not to prioritise Icesave refunds to the UK and Netherlands, a very large sum would be left owing. ”
It is true that Icelandic ” emergency law ” of October 2008 did put the depositors above the bond holders. ( Despite most peopel think that in bancrupcy that depositors must get priority that is not generally the case. )
As Brumley did say :
http://www.icenews.is/index.php/2011/03/07/emergency-merger-of-icelands-biggest-savings-bank-into-landsbanki/#comment-547355
” Your only hope is that the bondholders succeed in overturning the changed priority, giving you a better (but still poor) recovery. As that would probably have to be via the Icelandic court system, it’s probably an outside chance. ”
” Perhaps I’m being unfair, but I think it would be very hard for any legal system to rule its country into severe financial distress. ”
The ruling of the EFTA Suirvellance Authority which is a fairly impartial third party did give its decision on this end of 2001 :
http://www.eftasurv.int/press–publications/press-releases/internal-market/nr/1345
But still if you have standing I think that you will get a fair run from Icelandic judge in this case — but I think that you will not get far too much on legal arguments that I have thought about for you given that this was not a normal time and bancrupcy under normal market conditions.
http://www.bloomberg.com/news/2010-08-24/landsbanki-s-bond-holders-will-get-next-to-nothing-finance-minister-says.html
“Some of the bond holders are still hoping that the emergency legislation will be reversed, which would make the value of the bonds greater and deposits would be pushed behind them,” said a trader ..
..Landsbanki bonds were trading at 9.50 cents on the euro, according to data available on the website of H.F. Verdbref today [ August 25 2010 ]. That compares with 28 cents for Glitnir bonds and 25 cents for Kaupthing bonds. “
*The ruling of the EFTA Suirvellance Authority which is a fairly impartial third party did give its decision on this end of 2010 :
http://www.eftasurv.int/press–publications/press-releases/internal-market/nr/1345
*http://www.eftasurv.int/press–publications/press-releases/internal-market/nr/1345
This link does have two minuses in it — why is it being truncated by Icenews WordPress ?
To Fisy,
Iceland is partly today what is today with all the new infra–structure probably with the foreign investors’ money, directly or indirectly.
The Icelandic people lived way beyond their means and lived one of the highest standards of life in the world for many years, probably with the Foreign investors money, directly or indirectly.
For Double digit Billions or Euros and Dollars to dissappear, someone committed serious fraud. What has your government done over two years?
Is anyone in jail? NO. Have they reposessed any assets from fraudsters? NO
Kaupthing and Landsbanki are Icelandic banks in Iceland, your contry.
Why did these banks guarantee investments they could not guarantee?
Why did your government not do a good job by keeping an eye on the affairs going on at the Icelandic banks?
If you have a loan on your house and you cannot pay the bank, but you signed contract with your bank, your house gets reposessed and goes on auction to the highest bidder. The same should happen in Iceland.
Just because your Finance minister brings out an emergency law in favour of Iceland, does not mean it was fair. What about the investors that trusted your counrty to look after their money?
Thus with all the above points, I beg to differ with you hugely.
Iceland owes me and my family and many thousands of investors money.
I don’t care what your government says.
Anonymous / j did write :
>” The Icelandic people lived way beyond their means and lived one of the highest standards of life in the world for many years ”
Bjarni K did write a good history lesson+ to one of you posts before that you just ignore and keep on sayin the same thing. I am sorry for your loss but also for your bitter ness.
We are a rich nation by 2004 not because of the banks or foreign loans but because of selling our fish and investment in allumium and the state control removed from economy with prvatisations .
Glacier bonds were first issued in end of 2005 ++. Our banks was not privatized and did not seek cheap whole sale money loans until that year based on they credit rating.
Until then we were living inside our means.
Even though with privatization of the three banks it did mean first access to actual consumer credit for many people, this is still at very high interest rates compared to other consumers in Europe and we must pay it back. This was not a gift to consumers it was and still is loans at high interest.
Now our standard of living is back to where we were in 2005 or near to that. ( Although every one does have debts to pay back and many are living month to month on debt. ) We were however a richnation before the banking and hot money came in.
The lesson we have learned is that we must go back to sell things to earn money. Not borrow it.
It would be fine to be tax haven but the era of making money from transactions of banks and financial services is over for next 20 years or so.
We are a good base for companies though — even though current Red-Green colaiton has made foreign direct investment difficult and new companies tax difficult again.
What did kick start the hot money coming to Ísland was interest rates being very high compared to artificially low rates in US, Japan and EU countries since 2001.
Our interest rate were high here because 2004 – 2007 we did have money coming in to pay for construction of the new alunimum plant Alcoa Fjardaál at Reyðarfjörður and hydro dams feeding the power station Kárahnjúkar.
But we are not to apologize to you for not bailing out the bond holders like the idiot politiicans did in Ireland and also Brown in the UK. Yes it may be to protect the bond holder who mainly are the bank in Europe special from German Landesbanks from collapsing but now the people of Ireland and UK must pay for this for generations if they do not get rid of this ” odious debt ” with their new governments in.
Yes it is odious debt that these previous governemnts did make this debt for tax payer — even if they are democratic elected and not millitary dictators.
As to your ideas about investigations — we are only as far as I know country that has serious investigations into what happened leading up to 2008.
The team led by Ólafur Þór Hauksson ( and helped by the French and Norwegian invstigators reocmmend by Eva Joly ) is doing a thorough and care full job to get the worst offenders expect comleted with prosecutions by 2014.
Your increasingly bitter comments are not helping any one.
Please direct you efforts to some thing conscructive and live affirming. Not bitter and soul blackening.
If you have a case then sue here or in Portugal court. If your case is compelling enough you can get a lawyer pro bono or them on profit share of damanges obtained.
+http://www.icenews.is/index.php/2011/02/28/opposition-mp-says-yes-on-icesave/#comment-546633 there are other good ones but I did not find them because of lack of searchign facility by username at IceNews.
++http://www.icenews.is/index.php/2010/08/26/icelandic-state-not-responsible-for-icesave/#comment-266349
>If you have a case then sue here or in Portugal court. If your case is compelling enough you can get a lawyer pro bono or them on profit share of damanges obtained.
With this much money at stake you really should consider it :
anonomous says:
December 7, 2010 at 7:11 pm
..
” my father lost 420,000 euros and me 77,000 euros to rebuild the country. We lost this money in their bonds. ”
http://www.icenews.is/index.php/2010/12/06/icesave-draft-details-come-to-light/#comment-427240
anonynous says:
July 27, 2010 at 7:37 pm
..
” My proof – check bonds for research:?
XS0308636157 – Kaupthing
XS0244143961 – Landsbanki ”
http://www.icenews.is/index.php/2010/07/24/efta-extends-iceland-icesave-deadline/#comment-217029
Current prices :
XS0244143961 – Landsbanki http://www.wallstreet-online.de/anleihen/214439
XS0308636157 – Kaupthing http://www.wallstreet-online.de/anleihen/913418
Term sheets :
XS0244143961 – Landsbanki
http://web3.cmvm.pt/sdi2004/emitentes/docs/fsd10587.pdf
” 3. Interest Rate: 6.25 per cent. per annum payable quarterly in arrears.
4. Interest Payment Dates: 24th February, 24th May, 24th August and 24th November in each year, commencing on 24th May, 2006
5. Interest Amount: €15.625 per Preferred Security of €1,000 Denomination, payable quarterly on each Interest Payment Date.
..
13. Ratings: The Notes are expected to be assigned on issue the following ratings: “Baa1″ by Moody’s Investors Service Limited (“Moody’s”); and “A-” by Fitch Ratings (“Fitch”). ”
XS0308636157 – Kaupthing
http://www.kaupthing.com/lisalib/getfile.aspx?itemid=20687
“9. Interest Basis: 6.75 per cent. Fixed Rate
10. Redemption/Payment Basis: Redemption at par
..
PART B – OTHER INFORMATION
2. Ratings: The Notes to be issued are expected to be rated:
Moody’s: A2
Fitch: A-”
I just found this post I did not see before from Mike UK Nordic analyst :
http://www.icenews.is/index.php/2011/02/05/iceland-sends-eu-economic-forecast-document/#comment-544839
” anonymous
Winding up processes follow strict rules and that is true of Iceland. Those claimants against a bankrupt entity are allocated a priority. In descending order it is roughly: the administrators, the taxman, secured debt holders, unsecured debt holders and the rump goes to the shareholders. The last group usually get zilch. The second to last group frequently get close to nothing. The secured debt holders have direct and legal claim to the assets used as security. (Banks also involve depositors who can claim against the estate.) The situation in Iceland has been confused by a post-facto re-ordering of claimants and the allocation of assets in the bank split. Some claimants see the re-ordering as illegal and are challenging the move. So it depends what category your father’s bonds fall. If it is an unsecured bond then it may well be that your father will get nothing. That is the risk that you take when you are an unsecured debtor. We do not always come away with a profit – sometimes we make a loss. But the golden rule in finance is “No tears!” We are mature, responsible adults and if we come away with nothing then that is the way it is: “No tears!” If you can’t accept that then you shouldn’t be involved in investing.
(Obviously, if you suspect, and can show, that wrongdoing took place then you can take your case to court. The difficulty is that if everyone feels the same way then your position in the settlement won’t be altered.) “
Hi Fisy,
Thank you for your effort and research time.
Don’t you feel like laughing at these Banks and Ratings agencies?
What a joke, I’m sure that with most Banks in the EU and the US,
the money coming in at the end the end of the month is used to pay the CEO 1st(do not forget the fat yearly bonus), then the left overs between the employees and then the public?
I have learnt the tricks of the new age banking scams, they resemble true pyramid schemes.
As for me, I will from now only create debt and buy houses (Not in Iceland though).
Forgot to mention the Auditing firm involved too :-)
To anonymous,
Just be careful, you can just as easily loose money by purchasing houses through debt.
Something just came to mind, the Icelandic President seems to only puts motions through to a referendum when he does not want to pay up?
Or when he is not on the receiving end?
If his family was nearly destroyed by these recknless banks then he would not take the motion to a referendum? would you Mr. President?
It is the world of the rich and the poor.
The rich can only get richer, the middle class is being destroyed by schemes like these so as to make the poor class bigger and wider.
God save the middle class.
Prior to the bankruptcy, bonds were pari passu to depositors according to Icelandic Law. Bond investors could reasonably have expected a recovery of 50 cents or more given this status although the actual extent of the fraud perpetrated by Icelandic bankers threatens this assumption somewhat. Bond investors bought bonds knowing their status was protected by Icelandic Law and there was no Icelandic or indeed European precedent that I am aware of that suggests otherwise. The emergency law was a political decision in Iceland to steal money from one group of people (international bond investors) to give to the locals. The EFTA may support this theft in the interest of not upsetting the apple cart and certain other political reasons but that does not make it right decision.
The landsbanki bond holder problem is exacerbated by the priority given to international depositors over bond investors virtually denying bond holders any recovery from the estate. Giving international depositors (mainly the Dutch and British) priority was clearly not essential for protecting local Icelanders immediate interests and is an example of extreme self interest by Iceland through which it retained the potential to keep its relation with the UK and Dutch strong at the cost of fairness to and equitable treatment of bondholders
To Patria Furum,
There is definitely a lot of truth in what you are saying. There is no question that bondholders got badly treated when the emergency laws were passed, which gave the benefit instead to the depositors, both Icelandic and foreign. Whether this was the “correct” action to take, clearly depends on who you are talking to. The bondholders clearly do not think so, since they are now being paid much less than they otherwise would.
Now we come to the crux of the issue. Which are more important, the bondholders, or the financial system of the country involved?
Governments are always given a lot of leeway when they are facing emergencies or disasters, that can pose serious threats to the country’s stability. During these kind of emergencies, governments have the power to suspend or remove many kind of “rights” that we typically expect to have as citizens.
During this particular crisis, the Icelandic government determined during the Sunday night of October 5th, that if it did not do something immediately, then the whole financial system of Iceland would simply collapse the day after.
According to the special investigative report that was published, it was actually some consultants from JP Morgan London that finally convinced the government during a meeting at 2am, that the game was over and the only option left was to pass the emergency laws, to save what could still be saved.
The government simply decided in the end, that the well being of its citizens was more important, than that of the bondholders. Note that many of those bondholders were also Icelandic. For example, many of the pension funds in Iceland, lost also massive amount of money due to the emergency laws.
There was nothing particularly “fair” about the emergency laws. It was simply the only option left, for which the Icelandic government was forced to take.
Nice argument Patria. I suspect that it is flawed though, in that Icelandic legislators clearly appear to have been in a complete tizz over the whole affair. Witness the fact that they prioritised depositors but not the TIF.
It seems more likely to me that they prioritised depositors as a group because that was more defensible in terms of EU discrimination concerns than prioritising Icelandic depositors only.
You are correct thought that the route that they took just “happened” to be the one that dumped the least liability on the state if they were forced to stand behind the guarantee to UK/NL depositors. Given the “s**t on foreigners” moniker that was attached to the law, perhaps I’m being naive though.
Patria – very good information.
To Bjarni, Fisy and Bromley thank you for the good discussions :-)
Even though we might not always agree.
For me and my father it is difficult to accept this form of legal theft. But who knows what the future holds :-)
Keep it forthcoming.
Thank you
i´m living in the EU and you are right in your discussion about the discriminition.