“Not all conversations concerning this matter have been made public . . . When the matter is investigated, other conversations will have to be made public. I am aware of what they are about and I am aware of what in fact determined the position of the UK authorities,” the Financial Times quotes Icelandic central bank chairman David Oddsson as saying.
The implication, the article continues, is that the UK was right to use anti terror laws to freeze Icelandic assets at the beginning of the banking crisis in October. Furthermore, the FT states that any such revelations could damage any potential lawsuit filed against the British government by Reykjavik. The Icelandic government has hired Lovells, a UK law firm to investigate whether London acted illegally and significantly and unnecessarily worsened the economic crisis already unfolding.
Oddsson’s comments were made during a speech to the Iceland Chamber of Commerce late last week. As a former long-standing Prime Minister, current head of the central bank and prominent Independence Party figure, Oddsson is seen as a close ally of PM Geir Haarde, who once served as his minister of finance.
Oddsson and Haarde, among others, are credited with liberalising the Icelandic financial sector and also blamed by many for allowing the current crisis to unfold. As many as 90 percent of people now want Oddsson replaced, and a Frettabladid poll this weekend revealed that 70 percent of respondents no longer support the current government.
David Oddsson protests his innocence however; stating in his speech that he had been warning the government on the state of the banks for 18 months and was repeatedly ignored.
He also described the inquiry recently announced by the government as “a whitewash”.
“The investigation . . . is in all respects unsuitable and insufficient. It is almost laughable to see the posturing in the entire organised propaganda campaign which has been carried out by those who bear the prime responsibility,” he said.
(Photo: mbl.is/Kristinn)
Siegfried Sassoon (1886–1967)
The General
‘GOOD-MORNING; good-morning!’ the General said
When we met him last week on our way to the line.
Now the soldiers he smiled at are most of ’em dead,
And we’re cursing his staff for incompetent swine.
‘He’s a cheery old card,’ grunted Harry to Jack
As they slogged up to Arras with rifle and pack.
. . . .
But he did for them both by his plan of attack.
Well, well. The sooner the clandestine conversations are out in the open the better.
The 80,247 signatories on indefence.is are going to look a little silly. Impetuousness never helped anyone.
What an extraordinary speech. If even half of it is true, it indicates dreadful corruption and mismanagement at the heart of Icelandic big business.
No wonder the billionaires are hiding.
All you guys who kept going on about how Iceland had never reneged on the agreement (you know who you are GreatDane, William Watson etc. etc.) EAT YOUR WORDS.
Lets see Iceland take this to court. I’m going to get the popcorn to watch Iceland get owned all over again.
I bet those guys with their photos up on the “terrorist” website are feeling more than a bit stupid now. Last laugh is on them.
@ Julia Set – see also Gilbert and Sullivan – The Gondoliers (1889) Baron Haarde-Up playing the role of the Duke of Plaza-Toro
“In enterprise of martial kind,
When there was any fighting,
He led his regiment from behind —
He found it less exciting.
When, to evade Destruction’s hand,
To hide they all proceeded,
No soldier in that gallant band
Hid half as well as he did.
He lay concealed throughout the war,
And so preserved his gore, O!
That unaffected,
Undetected,
Well-connected
Warrior,
The Duke of Plaza-Toro!”
>William Watson
You won’t see him here, any more. Once the SNP lost the bi-election the ‘English, SNP hater’ dissappeared.
Iceland has some political significance in Scotland, apparently.
“Iceland has some political significance in Scotland, apparently.”
I’ve read the Scottish independency movement held Iceland in very high regard as a role model for years. The Iceland kreppa came at the worst possible moment for them. Ruined their whole line of ergument…
“clandestine conversations” or not…I do not see how the British government is going to justify the use of terrorist laws against Iceland. Which i want to remind, has been classified for many year as one of the most peaceful country in the world..where does Britain stands on this matter?
As history as shown….Davið Oddsson is saying everything and nothing. He is just craving for media attention… that´s it
I agree with Virgile – the assumption that Oddsson thinks Britain was right to use the terrorism laws is purelyt implied by the FT. From the quotes here, Oddsson actually appears to say almost nothing at all!
But, I had a quick squint at the full speech (the story above this on on icenews) and it’s 15 pages long…..so maybe he says something in the depths of there?
It’s known for years by the corrupted financial Icelanders the link of Icelandic private companies with the Bank of Scotland and SNP. Such has our friend Jón Ásgeirs.
3 Years ago, Baugur and today’s FL Group, had very suspicious relations. Invited and partying at 101 Hótel for numerous occasions celebrating their coalition force and most probably the sponsor of SNP.
Since now the accounts are frozen and under watch by London, they are most certainly planning a way out…
I hope, for the good or the bad, those criminals get caught.
“I do not see how the British government is going to justify the use of terrorist laws against Iceland. Which i want to remind, has been classified for many year as one of the most peaceful country in the world..where does Britain stands on this matter?”
Simple, the UK didn’t use anti-terror laws against Iceland. Its uses anti-mafia/crime law that also cover Terror.
Obviously there are still some Icelanders who believe their governments propaganda.
“Simple, the UK didn’t use anti-terror laws against Iceland. Its uses anti-mafia/crime law that also cover Terror.
Obviously there are still some Icelanders who believe their governments propaganda.”
And you seriously believe, that ruining a whole country with an Anti-Mafia/Crime/Terror law is the way to deal with strong business competitors?
Since the military way didn’t work in the cod wars, that’s the new way now?
Go back to your cave.
@Markus
Try and look at this way…. You’ve just been mugged and had your wallet taken, and the perpetrator is running away. If the nearest thing at hand capable of stopping him is a rock – you throw it.
Well the rock did the job!
Markus
Your comments shock me how ignorant you are. You are not even trying to get information around you… petty of you. Then you talk about going back to your cave? In which cave are you?
The British did not use the Anti Organised Crime law against the entire nation of Iceland. They used it against an Icelandic bank which was about to take Billions of pounds of British savers money and run.
No nation in its right mind would allow that.
It is a shame what has happened to Icelands economy, but it is not the fault of the British. A mature people should be able to face up to reality without trying to find scapegoats to blame for their own mistakes.
To orchafine:
You are going to have to come up with something more concrete than just that the owners were partying at some point together at 101 Hotel.
FL Group, which probably has the honor as probably being one of the worst performing investments groups from Iceland, was saved from bankruptcy last year by Jon Asgeir, which placed new assets and equity into the company. The new company was renamed into Stodir, which now owns mainly three assets: Glitnir (now worthless, due to the crash), Landic (property company, likely in trouble), and TM (large Icelandic insurance company).
Stodir was granted in Iceland moratorium on payments immediately after Glitnir stock was made worthless by the actions of the ICB. I am not aware of Stodir accounts being frozen separately anywhere else and Baugur accounts are certainly not frozen anywhere.
There are news and rumors in Iceland that some of the loans from Glitnir to FL Group, may not have been correctly issued, which should be fully investigated. But so far we have very little actual confirmed information on what exactly happened and who is at fault.
You are now calling them criminals. Do you have any specific facts on actual illegal acts between Baugur and FL Group (or their owners), you are accusing them of?
@Markus,
“And you seriously believe, that ruining a whole country with an Anti-Mafia/Crime/Terror law is the way to deal with strong business competitors?”
And you honestly believe that it was the UK that ruined your country? Get serious. Say that anywhere else than on an Icelandic forum and you’d be laughed off it.
As for the “Get back to your cave” thing. Seeing as it’s Iceland that is up the creek i would rather suggest it’s the Icelanders that are in need of a cave to crawl back into.
>Go back to your cave.
Ironic eh?
“And you seriously believe, that ruining a whole country”
UK didn’t ruin Iceland’s economy, Iceland did. If your country’s destiny depends on banks, its a good idea to ensure you have a strong regulatory system backed up with strong central bank.
“with an Anti-Mafia/Crime/Terror law”
Corrupt banking, legal and political system is best dealt with robust laws.
” is the way to deal with strong business competitors?”
They were not strong were they? Nothing more that Ponzi scheme. And without a lender of last resort the banks crumbled as soon as depositors realised how rubbish they were.
Hi everyone.
Concerning the freezing of assets and “what the Icelandic authorities knew/didn’t know”.
Between 29th and 31st March 2006 the three Icelandic banks, the Icelandic Chamber of Commerce, the Seðlabanki and the government (Geir Haarde was there) ran a “road show” at the offices of Barclays Capital in London.
The reason for the show was to present a “united front” in the face of a temporary loss of liquidity of the three banks. The banks explained that they were going to diversify away from wholesale funding and to take deposits in European countries.
The response of the European analysts was that this would not solve the liquidity problem of the three banks. They would be “matching” assets held in Iceland (bank assets are actually loans they have made) with liabilities in Europe (these are the deposits they proposed to take). The analysts pointed out that this mismatching was NOT a good idea since no sovereign (by which they meant governments) would allow the deposits of their nationals to be used to support commercial loans made in Iceland. At the limit the analysts predicted that these deposits (and any other Icelandic assets held outside Iceland) would be frozen. This is precisely what happened a short while back – nearly every European country with the necessary legislation froze the assets of the Icelandic banks where they could. (As some have pointed out the legislation used to freeze the assets in the UK was part of an act of parliament that had various provisions in it. The freezing of assets provisions were coming up for review at that time and the new provisions were bundled into this act. These provisions have nothing to do with anti-terrorism.)
At the meeting the analysts went further. They said that the situation of the three banks was opaque – nobody could see how their loans were performing nor where the money for those loans had come from. They made the suggestion that the Icelandic banks should publish UNconsolidated accounts – a different set for each country – so that any outsiders could see where the banks were exposed or strong. The three banks refused to do this. Equally Seðlabanki never made this a regulatory requirement. Consequently the three banks countinued to publish figures which apparently showed strong capital ratios. These ratios were completely false since they were using money from European depositors – money which could never be used in any practical sense to support the three banks capital structures.
Geir Haarde was present for this discussion. He knew exactly the warnings about freezing accounts. Remember, these were made in early 2006. Equally, he knew that the banks capital ratios were giving false readings. I don’t recall if Davið Oddsson was present but certainly the Seðlabanki was represented at those meetings.
It might be that Davið Oddsson has this meeting, and similar ones, in mind when he made his comments yesterday. Certainly, if the Icelandic government takes this to court they are going to lose the case, and look pretty stupid to boot.
Very few European banks have been caught in the Icelandic crash since most of them didn’t hold bonds from the three Icelandic banks. We may be stupid, but we’re not that stupid!
By the way, none of this is secret. Barclays Capital published a publicly available analysts note after the meeting with these points – and many others – in it.
Ok so some rich Icelandic bussiness men who had nothing else to do with there money decided to run the banks,now all Icelanders must pay the price…Get real all of you and go after these guys who where running the banks and not there customers before they run away with all there salary´s to your home country..
Bjarni, thank you for commenting.
If common Icelandic accounts and assets where frozen at some point in Iceland and England, it is a shame and again not a surprise, that big sharks can’t be included in such movements. Even though, I don’t think Brown is sleeping on this one. The new laws coming, will affect even more suspected relations between Iceland and Scotland.
Many Icelanders, such as Baugur and Glitnir employees, new about the jet planes going and coming from Scotland. More common Icelanders, will remember a party hosted by Jón to SNP head chair and the pot of investors. I even remember the name of the party: “Baugur Land”.
I will not say more about this, as you understand my discretion. Investigations are going through, and I am sure with some time the light will come into those dark affairs…
Now, about FL, every investor new this was an other move from Baugur to obtain more market shares, and like you said: Glitnir, TM and Landic.
So, Stodir is only a ghost investment. Was it used for dark movements?
For sure, the objectives here, weren’t for ROI or ROA.
Strangely, I remind you (rectify me if am wrong), that Jón could only get FL after his wedding. That said, only after an agreement was signed between Ingibjörg Palmasdóttir shares at Glitnir/FL and Jón; and of course, having also realized 6 month foreword a huge loan from Glitnir.
Too much game, too much coincidence, little proofs, that’s what it is financial corruption!
“And you seriously believe, that ruining a whole country with an Anti-Mafia/Crime/Terror law is the way to deal with strong business competitors?”
Total nonsense. The brits even offered to guarantee the deposits of Glitnir, in exchange for a relatively cheap fee of 200 millions (which Iceland could have afforded). But Haarde and his gangf refused. Then Glitnir crashed, as predicted, and after the news alarmed their customers the Icelandic banks wouldn’t have lasted a week.
Reacting on this, the Haarde gang froze the deposits of foreign savers first. Also, they planned to transfer money form UK assets to bail out Icelandic customers. This discrimination of foreign creditors was against the EEA treaties that Iceland signed, and the withdrawal of liquidity wold have damaged UK retail chains. Brown and Darling had to act to safeguard the British economy. And the law included a provision that dealt with such a case. It’s only the Icelandic governement and media which distorted the issue to divert attention from the scale of Icelandic incompetence.
These are the facts, and your accusation is totally baseless.
@Mike (UK Nordic analyst) – interesting
Information is starting to seep from dark places (in-so-far as non specialists have awareness).
Perhaps there will soon be reversal – with Iceland being resistant to court process.
“Ok so some rich Icelandic bussiness men who had nothing else to do with there money decided to run the banks,now all Icelanders must pay the price…Get real all of you and go after these guys who where running the banks and not there customers before they run away with all there salary´s to your home country..”
Your country, your regulatory environment, your companies, your citizens, your responsibility, your problem.
Thats what happens if you’re a sovereign nation and not a province.
Mike (UK Nordic analyst) said:
“Very few European banks have been caught in the Icelandic crash since most of them didn’t hold bonds from the three Icelandic banks. We may be stupid, but we’re not that stupid!”
I wouldn’t crow too much about how less stupid other European Banks were.
Some Eur losses in Iceland
Royal Bank of Scotland €677m
Irish Life and Permanent €96m
AIB €25m
Hypo Real Estate Germany got burned for €600m in Lehmans and Iceland amongst others.
Extent of other European losses are not clear yet.
There is a long list of creditors that had to give their permission for auction, European Banks were prominent enough in the very long list.
http://www.isda.org/2008icelandcdsprot/protocollistsdate.asp
Was it more or less stupid for some European Banks to invest in the sub prime market than to buy Iceland bonds?
Was it less stupid for IKB German bank to send Lehmans some € 300m a couple of hours before it shut down to top up its total loss there of €700m.
The answer to both probably would be, more stupid or at least equally stupid.
Northern Rock looks pretty stupid, a 100% loan plus 25% on top was nice while it lasted.
Leipzeig Bank = roulette banking.
Barclays Bank was quick enough though in dumping a load of its toxic debts in the nick of time to the French, not before “honourably” dressing them up in smart clothes.
AFAIC the UK had to do what it felt was best to the interests of it’s people re the Iceland Banks. I could imagine that UK Gov’s patience was stretched beyond reason. Desperately urgent times are not the occasions to be poring over the fine print no matter how unclear the text. The principle of State insurance for savers had been adopted de facto.
Certainly the UK Government adopted policy of laissez faire on regulating Banks/Investment companies has cost the UK people dear.
The UK national debt (according those intrepid TV economists BB&F), when all is said and done will reach £2Trillion. But if there was a voluntary euthanasia for people
NEW YORK — Standard & Poor’s cut Iceland’s long-term foreign currency rating to BBB- from BBB on Monday, citing the country’s mounting public sector debt burden. “The downgrade reflects Iceland’s substantially higher debt burden compared with our projections when we last lowered the ratings on Iceland on Oct. 6, as the Icelandic government will assume a greater share of its banks’ overseas operations in exchange for multilateral and bilateral balance of payments support,” said Standard & Poor’s credit analyst Eileen Zhang. Gross general government debt is expected to surge to over 130% of GDP, from the 29% at of the end of 2007, Zhang said.
Cont./
But if there was a voluntary euthanasia for people over the age of 65 years then there would be some relief.
Seeing as how the UK Gov allowed the once secure pensions to be gambled away.
“Your country, your regulatory environment, your companies, your citizens, your responsibility, your problem.
Thats what happens if you’re a sovereign nation and not a province.”
It’s still of course extremely annoying when a whole nation has to pay for something which has been caused by a small group of people – even though it was the ‘regulatory environment’ that eventually allowed that to happen.
By the way: Actually, we had a similar problem in Germany only a couple of years ago – in the state of Berlin (the ‘Bundesländer’ are actually states in legal terms, even though they are of course not independent, but form a union with the other states). The state of Berlin had to pay for the huge losses of its state-owned Landesbank which has caused equally huge financial problems for Berlin. However, the Federal Constitutional Court denied Berlin access to some extra money from the Bund (the union of German states) which Berlin wannted to have in addition to the money they get anyway from rich Länder-states like Baden-Württemberg, Bavaria and Hamburg.
By now the situation in Berlin has somewhat come back to normal. The worst for this Land seems to be over. So it seems to be true what a Glitnir expert has written a couple of weeks ago: Financial crises have a beginning and an end…
Who was responsible at The Central Bank of Iceland (Seðlabanki Íslands) for putting Joseph E.Stiglitz 2001-paper in a draw and throwing the key away?
When Joseph Stiglitz in late 2001 predicted the crises in the Icelandic economy, nobody in charge could have paid any attention. The Icelandic bank, Sedlabanki, asked the nobel prize winning Stiglitz to advice them what a small open economy as the one in Iceland, should and could do. They got their report, archived it, and for some reason they found it just now.
The Bank commissioned Mr. Stiglitz to undertake a study of the Icelandic economy with particular emphasis on factors relating to financial stability. Today we all know that his warnings and predictions were extremely accurate.
The Central Bank of Iceland is governed by a three-member Board of Governors, appointed by the Prime Minister.
The Board of Governors oversees the Bank’s operations and is authorised to make decisions in all its affairs which are not assigned by law to others, including monetary policy.
So, lets get some names on the table:
Board of Governors
Davíd Oddsson, Chairman
Eiríkur Gudnason
Ingimundur Fridriksson
Since the bank administratively comes under the Prime Minister and a seven-member Supervisory Board, which is elected by Parliament by a proportional vote after each general election, let’s mention the primeminister as well:
P R I M E M I N I S T E R
If nobody in charge takes responsibility and take their hat and leave, then everyone with symphathy for the icelandic people will have to wait for changes after the next general election.
You may be wondering on about the regulations in Iceland, but you might not know, that those regulations were from the EU, funny that.
The People, are not going to accept this, “selfgiving” and “yourmyfriend” goverments are over.
The taxpayers are not to blame and shouldn’t pay for the stupidness of others, you want’ to pay?, you already are, all over Europe and U.S.A.
I’t just isn’t as big as up here, have fun though in the coming months.
Rune Paulsen
Very well explained, but Iceland could get votes earlier. It all depends from the people!
Unlike the US, Icelanders are historically very keen in keeping their power sovereign.
While citizens are sinking more into the depression, unhappy citizens are coming more and more to express them self in front of the government, is also, much easier to fall than bigger countries.
If change is need, it will happen, it’s irrefutable!
Mike
Well said!
Even though a lot of common Icelanders had no idea of the financial happening in 2006, a lot of investors and interested people new the scam going on and his purposes to get fresh money.
Unfortunately, at that time they could only shut up! The rest of the population was to busy leaving in a party. Well done strategy from the Government, which by the way had nice helps from UK independent advisors. The little close committee of the conservative party…
So I think we shouldn’t only blame politicians, but go further in investigations.
1st, get a private investigation office.
2nd, end all bank secrecies.
3rd, elect an immediate provisory government constituted by citizen and politicians with no interests in any financial cases.
4th, find a common resolution, voted by referendum, for the pay bill of the crisis. Before is too late and Icelanders will be in obscurity until 2030.
Brad and Virgile
Oddsson says in his speech…
“They [the UK government] have explained, however, why they resorted to this drastic measure. Not all of the discussions concerning that matter have been published, and this makes it easier to serve up pre-digested accusations and feed them to a credulous public through media that have been abused blatantly for years, as the television commentator put it. I have no concerns about this because other discussions will doubtless be published when the matter is investigated. I know what was said, and I know what actually prompted the British government to take that action. ”
It seems that he is pretty clear that there was sound reasoning for the UK government’s actions and that it was linked to specific discussions.