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.