The chief investigator probing Iceland’s financial collapse has compared the dramatic implosion of the banking system with the infamous Ponzi scheme run by convicted fraudster Bernard Madoff.

Eva Joly, the French judge working with the Icelandic government on the investigation, said international regulators ignored a series of red flags about Iceland’s financial health, just as the American authorities did with Madoff.

The Financial Services Authority, which had an obligation to monitor the health of the Icelandic banks operating in Britain, has to take a share of the blame, she added. . .

“It’s not only Reykjavik that has to answer these questions. In London and Amsterdam there are questions to answer, too.” . . She added: “The Icelandic central bank made it quite clear in 2007 that it would not be able to stand behind its banks if they had problems.  13-Sep-09.

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6832329.ece