Negotiations with Iceland over the repayment of £2.3 billion in debts to the UK have broken down after representatives of the island nation walked out of talks in London.
The walk-out means that Iceland will next week hold a referendum expected to reject a deal for repayment of cash owed to Britain and the Netherlands as a result of the collapse of Landsbanki, the bank behind the Icesave internet savings account.
The UK and Dutch governments this evening said they were "disappointed" that no deal had been reached after 18 months of talks.
Sources close to the talks said that Iceland had been offered an advantageous new floating interest rate on the debt, based on Libor (London inter-bank rate) plus 2.75%, which would have represented a significant cut on the 5.5% currently being charged. Also on the table was the offer of a two-year interest holiday worth around £400 million. 25-Feb-10.
Brussels - Repayment of money spent by the Dutch and the British governments to rescue savers caught out by the Icelandic banking collapse is a "bilateral" matter between the countries concerned, the European commissioner for enlargement said Wednesday. Stefan Fuele was defending the European Commission's decision to give a positive opinion on the start of EU-Iceland accession talks before the issue is resolved.
"While the commission is following closely talks between Iceland on one side and (Britain) and the Netherlands on the other side, it is of the opinion that this is a bilateral issue that has no implication on the opinion," he said. Iceland rejected Monday a Dutch and British a new proposal to repay 5.4 billion dollars lost by investors when Icesave bank, an arm of the Landsbanki lender collapsed in the autumn of 2008. Earth Times website - 24-Feb-10.
The leaders of Iceland’s political parties have decided to politely request further talks with the British and Dutch authorities over Icesave.
The meeting between Icelandic government and opposition party leaders has just finished where it was decided that no counter offer will be sent to this weekend’s Icesave repayment proposal from the British and Dutch governments. Instead, the party leaders have decided to send a courteous response to London and The Hague requesting a further trilateral meeting of the three nations’ negotiating teams.
Both the government parties and the opposition parties agreed at the meeting that the new offer is not acceptable. It still needs amendments. 22-Feb-10.
REUTERS: The Netherlands and Britain are proposing a new debt repayment deal with Iceland which may save the island nation holding a politically risky referendum on the Icesave crisis, a source said Friday.
Speaking on condition of anonymity, the source familiar with the situation said the offer's main feature is a floating interest rate designed to ease Iceland's burden as it repays $5 billion (3.24 billion pounds) to the two European Union countries.
The offer maintains other elements of a deal the three sides agreed in October, including full debt repayment and a 7-year grace period, the source told Reuters.
The source described it as "an offer they can't refuse," specifically designed to address the Icelandic government's primary concerns about the existing arrangement while guaranteeing a reasonable rate of interest for its creditors. Yahoo! UK & Ireland News website - 19-Feb-10.
Icelandic bankers and British ‘rate tarts’ caused the Icesave folly, yet the two nations’ taxpayers will be footing the bill.
Iceland was a nation that took huge pride in the fact its government used to owe nothing. The phrases “net debt-free” and “debtless” would pepper the briefings of its senior financial officials before the crisis. But then came the crazed ingenuity of Iceland’s bankers in funding themselves through thrifty British and Dutch internet savers, rather than sophisticated international financiers. And so from the likes of Icesave arose a giant Icedebt. . .
The path to this point was novel but predictable. The causes of the crisis have lessons that should be heeded well beyond this northern Atlantic rock. Business and Marketing News, Funds, Finance and Stock Market website - 18-Feb-10.
Depositors with the failed Guernsey bank Landsbanki have suffered a setback to their campaign to get their money back.
The bank went into administration in 2008 following the collapse of its parent in Iceland.
Some of the Guernsey depositors' cash had been sent to the parent bank and efforts are underway to recover it. But the depositors have now been told they're among creditors classed as a "low priority" by the parent bank.
Landsbanki Iceland is also refusing to recognise the guarantee it offered for savings with Landsbanki Guernsey. 15-Feb-10.
* [For the avoidance of doubt LG depositors' claims were arbitrarily rejected 'in every respect' and given no 'priority' at all.]
REYKJAVIK (Reuters) - Iceland is set to resume talks Monday with Britain and the Netherlands on repaying more than $5 billion lost when Icelandic banks collapsed in 2008, Finance Minister Steingrimur Sigfusson said Sunday. . .
A new negotiating team would leave Reykjavik to attend exploratory meetings Monday, Sigfusson told state radio, without saying whether the talks would take place in Britain or the Netherlands. . .
Reykjavik plans to make a new proposal which a government source said involves quicker repayment of the debt with a sale of the assets of failed bank Landsbanki. 14-Feb-10.
Landsbanki Guernsey depositors around the world have begun to receive a message from the Winding-Up Board of the bank’s Icelandic parent saying that it has “decided to reject” their claims for compensation on the grounds that “it has not been sufficiently shown” that the parent entity had ever agreed to guarantee its Guernsey arm's liabilities.
News of the rejection of the depositors’ claims for compensation was disclosed to International Adviser today in an email from Landsbanki Guernsey depositor Mark Ashbey, a member of the Landsbanki Guernsey Depositors’ Action Group (LGDAG).
Another member of the group, Matthew Dorman, said both his organisation and the joint administrators, Deloitte, “had been expecting this” and would be submitting objections to the decision to the Winding-Up Board. They will also continue to pursue their legal actions against Landsbanki Iceland and the Icelandic government, he added.
Spokespersons for Deloitte could not immediately be reached.
Around 1,600 depositors, more than 90% of them British, had some £120m on deposit in the Guernsey branch of Landsbanki when it collapsed in October 2008. At the time, Guernsey did not have a depositors’ compensation scheme in force. So far the Guernsey depositors have received about 67.5p in the pound, unlike Landsbanki depositors in the UK and Netherlands, who received 100% of their money months ago. International Adviser website - 14-Feb-10.
The UK Treasury has stood by its position on the collapse of Icesave, as the head of the Dutch central bank accused the Icelandic government of misleading it about its financial system. . .
Mr Wellink told a parliamentary committee in the Netherlands that he had been given false assurances by Icelandic government officials and regulators about the safety of the banks.
Matt Patterson, spokesman for the UK Treasury, declined to comment on Mr Wellink's remarks but said all three parties were trying to reach an agreement on the issue. . .
Gylfi Magnusson, minister of economic affairs for Iceland, said in a statement: "We take such allegations very seriously.
"One of the tasks before us is to understand whether false or misleading information was presented by the Icelandic banks, regulators and government officials to foreign regulatory agencies in the months leading up to the collapse of the banking system in October 2008." FT Adviser website 11-Feb-10.
The Icelandic government intends to propose paying no interest on its Icesave debt.
According to RUV, the Icelandic government could save around ISK 130 billion if interest on the Icesave debt is removed from the total bill at negotiations with the Dutch and British authorities, which start next week. 12-Feb-10.