A response from the Ministry of Economic Affairs to the EFTA Surveillence Authority‘s Letter of Formal Notice regarding the Icesave dispute was submitted by the Ambassdor of Iceland in Brussels earlier today.
(Press release)
In the response, Iceland maintains that it did not fail to comply with its obligations under Directive 94/19/EC. The Government urges the Authority to conclude the matter without any further action.
Payments from the estate of the failed Landsbanki to priority claimants, including the British and Dutch governments, will commence as scheduled. The Icelandic Government is optimistic that in due course all depositor claims will be paid in full. Unilateral action by the British and Dutch authorities has not helped in this respect. The response lays out Iceland‘s position on the issue, the background and facts of the matter, and the Government‘s legal argument.
Iceland‘s response to ESA can be read in full here.
Reykjavik May 2, 2011.
To what Bromley86 has written, I would also add that it should be borne in mind that the British government had experienced the failure of Lehman a few weeks before, in which $8bn had been transferred out of the UK business the night before it was declared bankrupt. No doubt the British government were keen to avoid another event like that.
>The Germans did not unitalerally reinburse the depositors immediatelly without asking — but instead worked with Icelandic administrators of Kautphing resolution committee.
>That’s the point, and you know it :)
No I don’t. As I’m sure you’ve seen in the other thread, I’ve even said that I don’t.
Explain to me the difference between these two situations:
1. A government freezes the assets of a branch. That government moves immediately to cover the minimum guarantee because they have been told that home state government doesn’t know what it is going to do. They talk with the home state to determine what happens next.
2. A government freezes the assets of a branch. That government does not immediately cover the minimum guarantee. They talk with the home state to determine what happens next.
How did the Germans not covering the minimum guarantee affect anything?
>Brown and Darling lied and paniced ( at best ) to save the UK banking system in the Landsbanki / IceSave case, without giving Iceland TIF or government or resolution committe any time to even think about what to do to address the Landsbanki branch and certainly not the 3 months allowed by the directive for TIF to payout.
No. The UK government took a course of action that was legal, sensible and (per Mike (NA)) one that Iceland had been told would happen 2 years previously to safeguard the UK economy.
There had been intensive discussions with Landsbanki and the CBI. Promises made by the Icelandic side regarding funding were broken. These were regulatory requirements, not a gentleman’s agreement like those with the Dutch regarding limiting deposit amounts.
None of these actions prevented any Icelandic agency from taking the allowed 3m to pay out from the TIF. Please feel free to make the case that they did.
Please also feel free to make the case that it is alright for the Icelandic government to act in the interest of its citizens but not for the UK government to do likewise.
you like the part mr. Brown is going to be “pressing” the goverment don’t you?…;)
Árni Páll Árnason said :
“We’re hopeful that our remarks will lead to the ESA being able to close the issue and not proceed with the matter [ so that we the useles Social Demicrats can get on with the EU application changes to Icelandic laws before Icelandic people wake up to them and get upset ] ”
To court!
Brumley wrote :
” 1.2 (vi) is a very amusing comparison between the freezing of Landsbanki in UK and “the swift resolution of the KE payment from the estate undisturbed by the German government.” Amusing because the Germans did exactly the same thing as the Brits and froze the KE branch assets in Germany. ”
The Germans did not unitalerally reinburse the depositors immediatelly without asking — but instead worked with Icelandic administrators of Kautphing resolution committee.
That’s the point, and you know it :)
Brown and Darling lied and paniced ( at best ) to save the UK banking system in the Landsbanki / IceSave case, without giving Iceland TIF or government or resolution committe any time to even think about what to do to address the Landsbanki branch and certainly not the 3 months allowed by the directive for TIF to payout.
And you know this also.
““We’re hopeful that our remarks will lead to the ESA being able to close the issue and not proceed with the matter,” Arnason said in an interview”
http://www.bloomberg.com/news/2011-05-03/iceland-aims-to-skip-court-fight-as-depositors-face-full-payout.html
:)
Had a quick read through the summary of arguments. There’s a lot of fluff, but as expected the meat of it is the argument over the meaning of “ensured”.
An interesting spin-off was an attempt to make the term “ensured” less absolute (i.e. the government ensured as far as possible given the difficulties that Iceland faced). Can’t see that working myself. There’s also an attempt to market the reprioritisation of depositors as ticking the ensured box, which again seems a little unlikely. But IANAL.
1.2 (vi) is a very amusing comparison between the freezing of Landsbanki in UK and “the swift resolution of the KE payment from the estate undisturbed by the German government.” Amusing because the Germans did exactly the same thing as the Brits and froze the KE branch assets in Germany.
http://www.ft.com/cms/s/0/50dbe136-9664-11dd-9dce-000077b07658.html
Well, I was expecting to see some sort of surprise defence. In fact its simply re-iteration the feeble excuses that have already been dis-proven in the original letter.
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