When one of the billionaires behind the collapsed internet bank Icesave was asked in a new film what happened to all the money, his answer was astonishingly nonchalant.
"A lot of money goes to money-heaven," shrugged Björgólfur Thor Björgólfsson, the London-based investor who co-owned 41pc of Icesave's parent bank, Landsbanki.
"The value that has been wiped off the stock markets, and the deposits in the banks and investment funds have gone. They have evaporated. It's a common misunderstanding to ask, 'where did the money go'?" . . .
Public outrage has been brought to a peak by the fact that there are now 43 cases of alleged criminal activity under investigation in connection with the country's scandal-hit financial institutions, including Landsbanki, and, in the country's first referendum, the 320,000 people of the island were expected to vote against a deal to compensate the UK and the Netherlands for the failure of Icesave. 06-Mar-10.
Voters in Iceland are expected to have opted not to repay £3.5 billon lost in a bank collapse to Britain and the Netherlands, with the country's leader calling on Gordon Brown to settle the dispute.
Polls have suggested today's referendum, on whether or not taxpayer's will fund the repayments, could see up to three-quarters of Icelanders voting 'No'.. .
Grimsson said his country would accept a "fair deal" over the repayments and urged Gordon Brown to show "statesmanship" as he did on the global financial crisis, to avoid a second referendum, by putting forward a more "balanced agreement".
He told BBC Radio 4’s Today programme: “What is important following this referendum and in the light of the outcome is that the leadership of Britain and the Netherlands, especially Gordon Brown, will now take the matter into his own hands, which he has not done. 06-Mar-10.
Christian II, King of Denmark and Iceland, tried to sell Iceland to King Henry VIII and the Dutch cities in 1509. . .
. . .I don’t understand the attempts of the British and Dutch governments to force the Icelandic public to pay debts which we did not create at all.
Most of the funds accumulated by the Icesave accounts by the crazy bankers at Landsbanki were used to fuel businesses and acquisitions in the UK and the Netherlands. The bank paid taxes in these two countries.
Lansbanki bank should also have been monitored properly by the authorities in these countries when it offered higher interest rates than all other banks.
I’ve always argued that the remaining assets of the crashed Landsbanki should be used to pay the Icesave account holders as far as they can cover the amounts. That would simply be fair. It has been claimed by our government that these assets will cover up to 90 percent of the Icesave debt. 04-Mar-10.
Thorolfur Matthiasson, Professor of Economics at the University of Iceland in Reykjavik, explains some of the issues Iceland faces due to the collapse of IceSave:
The Icelandic Landbanki and its internet branches in London and Amsterdam, IceSave, collapsed in October of 2008. An emergency law cooked up in haste secured the operation of the Icelandic branches. Icelandic deposits were moved from the fallen bank to a new bank along with some of the assets of the fallen banks necessary to cover the deposits. Hence, the crash caused no disruption for domestic deposit holders. That was not the fate of the IceSave depositors in England and the Netherlands. At stake were €1.7bn in the Netherlands and £4.5bn in England – enough to catch the attention of high ranking government officials. . .
This claim does not stand up to scrutiny when matched with the economic facts presented above. What is going on? Well, this is where Baron Munchhausen enters the story. The Icelandic people have been led to believe that they stand to pay the gross amount of the guarantee, that the debt owed to the Dutch and the UK is more than 50% of GDP and that it will take generations to pay back this debt. The opposition in the Parliament, parts of the supporters of the Icelandic Government in Althingi and private pressure groups possibly with political ties have put on the clothes of Baron Munchausen and exacerbated the situation. Economists View website - 03-Mar-10.
March 2 (Bloomberg) -- A referendum in Iceland isn’t the kind of event that would usually attract much world attention. This time will be different.
The country will vote this week on how to pay back the money it owes the U.K. and Dutch governments for bailing out the Icelandic banks that crashed during the credit crunch.
On March 6, Icelandic taxpayers should send a message to the rest of the world: Can’t pay, won’t pay, so go take a hike. . .
Third, the depositors were just as much at fault as anyone. They put money into Icelandic banks, which paid higher rates of interests than almost all their competitors. And yet you need an IQ of only about 10 to know that higher rewards involve higher risks. It was a stupid decision to deposit their money in those banks, and there is no reason to protect them from the consequences of their poor judgment.
Also, let’s bear in mind that the depositors were probably a lot wealthier than the ordinary Icelanders who will end up paying the bill. Why should prudent poor people pick up the tab for greedy rich ones? BusinessWeek website - 01-Mar-10.
Icelandic officials have restarted negotiations with their counterparts from Holland and the UK over $5.3 billion owed to investors from the two countries following the collapse of Landsbanki in 2008.
fortnight of talks ended in deadlock last week, but the sides have returned to the negotiating table to thrash out a deal.
Time is running out before a referendum takes place in Iceland on Saturday (March 6th 2010) on whether the state should foot the bill for repaying foreign investors. bobsguide website - 01-Mar-10.
REYKJAVIK (Reuters) - Icelandic negotiators may return home on Monday from London if no new meetings are called with British officials over the Icesave debt crisis, Icelandic Radio quoted a finance ministry spokesman as saying.
Officials from the two countries met in London on Saturday but the radio station said no formal meetings took place on Sunday, although the negotiating teams had been in contact. . .
Iceland wants a new deal to avoid a referendum on March 6 on a previous agreement which the island's voters are almost certain to reject, undermining the government's credibility and delaying access to vital economic aid. abcNEWS/Money website - 28-Feb-10.
The long awaited ‘Black Report’ into Iceland’s economic crisis is set to be delayed once again due to the long responses received from implicated parties.
The report by the Althingi investigation committee will be delayed by a further two to three weeks while committee members go over the more than 500 pages of answers received from the 12 current and former public officials formally invited to reply to committee accusations before publication of the report.
The report was originally scheduled for release last autumn and then delayed until the beginning of February, then the beginning of March and now, again, until two to three weeks into March, RUV reports. This time, the committee has not committed itself to a specific date.
A statement from the committee stated that the answers received represent the final materials needed and all that remains to do is to correlate the findings and print the extensive document. At this stage it is already logistically impossible to release it before the 11th March. 27-Feb-10.
REYKJAVIK (Reuters) - Iceland faced an extended cash crunch on Friday after failing to reach a new debt deal with Britain and the Netherlands.
Prime Minister Johanna Sigurdardottir held out the possibility of a last-minute deal over some $5.5 billion (3.6 billion pound) of “Icesave” debts despite the abrupt collapse of discussions on Thursday.
Time is running short, as a referendum is scheduled for March 6 over a previous repayment deal.
Voters are expected to reject that accord, putting the government under pressure and further postponing the prospect of financial aid to help revive the stricken economy.
The International Monetary Fund and Nordic countries have promised to loan cash-starved Iceland around $4.5 billion to help it to remove capital controls and get the economy moving again. But this is all on hold pending resolution of the Icesave debt.
“Nobody dares invest anything in Iceland until this issue is resolved,” said Lars Christensen, senior analyst at Danske Bank in Stockholm. Businessmortgageprovider website - 26-Feb-10.
Talks between Iceland and the Treasury over the repayment of a $5 billion (£3.3 billion) bailout loan hit a stalemate yesterday after the Government in Reykjavik insisted that the proposed interest bill was too onerous.
While Johanna Sigurdardottir, the Icelandic Prime Minister, said that she hoped a deal was still possible in the short term, Britain and the Netherlands, which are owed the money, are dismayed that a revised interest repayment schedule has been rejected.
If the stalemate continues, it is expected that Icelanders will effectively vote to reject repaying the money in a referendum scheduled for March 6. 27-Feb-10.