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Iceland News

This page contains brief summaries of and links to media reports on the topic of Iceland News.

Iceland says Landsbanki assets worth $1.4 billion more

REYKJAVIK, March 2 (Reuters) - Iceland said on Wednesday it had revised up its estimate of the value of the assets of failed bank Landsbanki, a casualty of the 2008 financial crisis, so that it now had some $1.4 billion more with which to pay off debts to creditors.

Britain and the Netherlands spent billions of pounds and euros to compensate savers who lost money in so-called 'Icesave' accounts operated by Landsbanki, and both countries have been pressing Iceland to get money back.  . .

The Icelandic crown is not traded freely due to strict capital controls, but according to the central bank's latest crown value, 160 billion crowns is worth $1.4 billion.

Opinion polls show Icelanders will approve the new deal.
A resolution to the Icesave dispute is seen as important for the country's recovery and eventual financial rehabilitation. London South East website.  02-Mar-11.

Key players in Iceland bank crash in court as witnesses

It is believed as many as seven people will bear witness today at the Reykjavik District Court in the case against Baldur Gudlaugsson, former permanent secretary at Iceland’s Ministry of Finance.

Jonina S. Larusdottir, former permanent secretary at the Ministry of Trade, is at the top of the witness list . . .

It was also expected that Ingimundur Fridriksson, former director of the central bank, and Halldor J. Kristjansson, former director of Landsbanki, would testify today by telephone. The judge decided at the beginning of proceedings this morning that they need to testify in person. They will therefore be called upon at a later date.

Gudlaugsson is accused of insider trading, allegedly having sold all his personal Landsbanki shares shortly after sitting in on a meeting with UK Chancellor Alistair Darling and shortly before the bank’s collapse in the autumn of 2008.  02-Mar-11.

Iceland to Hold Referendum on Law to Repay $5 Billion U.K., Dutch Deposits

Iceland’s President Olafur R. Grimsson refused to sign a $5 billion accord struck in December with the U.K. and Netherlands to repay foreign depositor losses and said the bill must instead be put to a referendum.

Grimsson, whose announcement comes after 44 of parliament’s 63 lawmakers passed the bill, said he was responding to popular demand for a plebiscite after more than 42,000 of Iceland’s 318,000 inhabitants signed a petition asking him to block the accord . . .

It is unclear whether the British and Dutch will be willing to resume talks should the bill be voted down in a referendum, Finance Minister Steingrimur J. Sigfusson told reporters shortly after Grimsson announced his decision. Sigfusson said he plans to contact his counterparts in the two European Union members later today. 20-Feb-11.

New Icesave Deal Approved By Icelandinc Parliament But Will The President Sign It Into Law?

Iceland's lawmakers have approved another deal to repay 4 Billion Euros the UK and the Netherlands for the collapse of the Icesave Bank almost two years ago by a 44-16 margin with three abstentions. However, the big question is will President Olafur Ragnar Grimsson sign it?

So far the President has not said whether he would sign the bill or not. But according to recent statements he believes this deal is better than the one he vetoed last time.  The money is owed to the British and the Dutch governments for having  to reimburse almost half a million citizens following the collapse of Icesave and its parent company Landsbanki in 2008. . .

The Icelandic Government believes the total cost to the taxpayers would be much less than the 4 Billion Euros as most of the repayment would come from selling off the assets of Landsbanki.  eGovmonitor website. 16-Feb-11.

Custody Confirmed over Former Landsbanki CEO

The Supreme Court of Iceland confirmed yesterday the verdict of Reykjavík District Court that former CEO of Landsbanki, Sigurjón Th. Árnason, is to remain in custody until January 25. Árnason had appealed the District Court’s verdict. . .

Iceland’s Special Prosecutor is currently investigating alleged market abuse at Landsbanki from 2003 to 2008.  19-Jan-10.

Landsbanki executives arrested in Iceland

Police in Iceland have arrested the former boss of failed bank Landsbanki and another senior executive.

Former chief executive Sigurjon Arnason and Ivar Gudjonsson, ex-head of the bank's investments arm, were held on allegations of market manipulation.  14-Jan-11.

Iceland deal may be put to vote

Icelanders may demand another referendum before agreeing to pay the £2.2bn owed to Britain after the collapse of Landsbanki's UK retail bank Icesave.

The latest deal, under which Reykjavik will repay the sum plus interest at 3.2%, is regarded as far better than the previous scheme, which set the rate at 5.5%.

Johannes Skulason, a senior figure in the InDefence campaign that opposed the last deal, said many Icelanders were still sceptical.

'People are trying to work out what this will cost our country and at the moment the view is still mainly pretty negative,' he said.  19-Dec-10.


Icelandic banks 'broke the rules' before UK deposits

Glitnir and Landsbanki were breaching banking regulations by the time 64 British local authorities deposited most of their £800m into the Icelandic lenders, according to two secret reports on the collapse.

Documents commissioned by Iceland’s special prosecutor and seen by The Sunday Telegraph suggest Glitnir was operating below the legal limits of its capital adequacy ratios by the end of 2007. A second report for the prosecutor’s office claims Landsbanki also breached the conditions of its banking licence at the end of 2007.. . .

Both reports are critical of Landsbanki’s and Glitnir’s auditors, the Icelandic branch of PricewaterhouseCoopers (PwC), arguing that it should have spotted mis-statements.


PricewaterhouseCoopers criticised in Landsbanki crash report

A report on behalf of Iceland’s Special Prosecutor into the banking crisis says that the Icesave debt upon the Icelandic state would have been massively lower had PricewaterhouseCoopers, Landsbanki’s external auditing company, done its job properly.

According to the report’s Norwegian main author, if PricewaterhouseCoopers had been honest in its reporting of Landsbanki, the bank would have lost its operating licence no later than the end of 2007.

Among other things, the report criticises the auditors for not having flagged up the so-called Icelandic Affair. The Icelandic Group took massive loans from Landsbanki and was allowed to continue borrowing after it became apparent the company would have difficulty servicing its debts. Icelandic Group was saved from being put on Landsbanki’s defaulters’ list by a EUR 40 million loan from Grettir ehf. Grettir ehf. in fact got the 40 million directly from Landsbanki and all three companies involved were owned by Bjorgolfur Gudmundsson. . . 10-Dec-10.

Iceland corruption investigator Eva Joly may quit in frustration

Iceland's anti-corruption expert, Eva Joly, investigating "suspicions of criminal actions" at Kaupthing, Glitnir and Landsbanki, has threatened to resign if the inquiry continues to be dogged by lack of political will.

Eva Joly, who advised on France's Elf Aquitaine scandal and the UK's BAE inquiry, said the scale of potential corruption at the Icelandic banks should be treated as one of the important financial investigations Europe has ever known. . . .

In a television interview, she criticised a lack of political will in the Icelandic government to bring anyone who has committed economic crimes to justice.

Iceland's special investigation team is now working on more than 30 potential cases relating to the banking system, after Kaupthing, Glitnir and Landsbanki collapsed and were taken over by the Icelandic government last October. 02-Dec-10.

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