Yesterday was the sixth and penultimate day of witness testimony at the court case against former Icelandic Prime Minister Geir H. Haarde. Six people testified at the Cuture House in Reykjavík and one testified by telephone from Canada. Today is the final day of witnesses.
The first witness was former foreign minister and head of the Social Democrats, Ingibjörg Sólrún Gísladóttir; but the day overall belonged to the bankers. Ingibjörg was followed on the stand by Sigurður Einarsson, former chairman of the board at Kaupþing; former Glitnir director, Lárus Welding; joint former directors of Landsbanki, Halldór J. Kristjánsson and Sigurjón B. Árnason; former chairman of the board at Landsbanki, Björgólfur Guðmundsson; and Stefán Svavarsson, Landsbanki’s former chief auditor.
Landsbanki representatives told the court that they had stopped discussing moving Icesave funds to a subsidiary in the United Kingdom because of political wrangling over the issue in London. Once that decision had been made, the bank’s liquidity position became largely irrelevant. Landsbanki and the level of funding in the Icelandic depositors’ insurance fund were discussed in the British parliament in summer 2008.
In her testimony, Ingibjörg Sólrún Gísladóttir said that she found it “completely obvious” that if one bank fell, the others would follow. She said the point was discussed within the Social Democrats as early as March 2008.
She also told the court that part of her party colleague Össur Skarphéðinsson’s testimony last week was not true. She asserted that she never told him to avoid telling the commerce minister about the emergency meeting at the Central Bank of Iceland; adding that anyone who knows her personally knows that the phrase “keep it under wraps” (in English) is not something she would generally say. She said she would never be as devious as to use a major crisis to score points against a fellow minister.
In a further rebuttal she said former governor of the Central Bank Davíð Oddsson’s claim that she advised providing the banks with a EUR 40 billion state-backed loan to save them was not true; asking how she could have made such a recommendation from the New York hospital operating theatre she was in at the time. She said the recommendation must have come from her stand-in as Minister for Foreign Affairs; Össur Skarphéðinsson.
Among the points made by Björgólfur Guðmundsson were that, contrary to popular belief, Icesave did not amass huge deposits in the UK solely because of its market beating interest rates; but also because the accounts were good, the service was good and people recommended them to others and were satisfied customers. He added that he did not see much constructive the Icelandic government could have done to push the issue of moving Icesave to a British subsidiary.
This article is compiled from reports by RÚV.
(Homepage photo: VisitReykjavik.is)