30-Mar-2016: Liquidators' Update, see Deloitte site

Other Sources

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Landsbanki Guernsey depositors call attention to comments in UK Justice Committee report

Members of a group of depositors who were caught up in the collapse of Guernsey's Landsbanki branch in 2008 are calling attention to comments in a recent UK Justice Committee report that they say proves their claims the situation was badly handled.

The report “shows the government of Guernsey in a very bad light insofar as its actions – or rather, inactions – in managing [Guernsey Landsbanki’s] failure in 2008,”  said Mark Ashbey, a depositor and also a member of the Landsbank Guernsey Depositors Action Group, which represents 1,600 British depositors, many of them pensioners, who had an estimated £120m on deposit in the Guernsey-regulated bank when it failed. . . .

Among the Justice Committee's recommendations were that the Ministry of Justice "consider alternative models for the representation of the interests of the Crown Dependencies internationally."

"It is imperative that a means is found by which the islands are represented effectively, and we strongly recommend that certain officials, either from the UK or from the islands, be specifically designated as representing the islands in international negoations," the report notes.  International Adviser website - o8-Apr-10.

Cold comfort for Iceland victims

The world may have moved on, but some depositors caught up in the Icelandic banking collapse are still waiting for compensation.

Some 67 MPs have signed an Early Day Motion for the Government to define who's responsible for dealing with the £500 million lost by savers in Kaupthing Singer and Friedlander Isle of Man.

The Isle of Man regulator says: “Not us guv. The FSA and HMG told us to move the money to the UK.”

The FSA and Treasury say: “Depositors in the Isle of Man are covered by the Isle of Man regulator” — a right muddle in other words.

Many of those who lost their money are British expats who wanted to use a UK bank, but if you don't live here you can't have a UK bank account. The advice of the FSA has always been therefore to “use a UK bank in an offshore dependency” — like the Isle of Man, in fact.

So you do as they say, your money goes up in smoke, and then you sit in regulatory no-man's land with nobody prepared to address the issue with any urgency!  City  Spy - Business Section - London Evening Standard website - 24-Mar-10.

Guernsey Financial Services Commission being disingenuous?

Right up to days before Landsbanki Guernsey collapsed in October 2008 the Guernsey Financial Services Commission had been reassuring concerned Landsbanki Guernsey savers enquiring by telephone that they need not fear for their savings because a 100% Parental Guarantee was in place. Indeed the Parental Guarantee had long been Guernsey's primary marketing tool to attract retail deposits to bolster its finance centre. Now that Landsbanki's Winding Up Board in Reykjavik has made abundantly clear that it is refusing to recognise any sort of guarantee, the GFSC appears to have changed its tune: it is telling enquirers that a Parental Guarantee was never a requirement and that - even if one were in place - it would not be legally binding. The question that springs to mind is: could savers be forgiven for thinking that the GFSC is being disingenuous? . . .

Now they are informing depositors who have lost life's savings that they should have read this obscure and very technical Consultation Paper and, by implication, should have moved their savings elsewhere. It was their own fault. Is the GFSC being disingenuous? What do you think?  12-Mar-10.

An Icelandic Saga by Baron Munchhausen?

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.

Bailout Mutiny Looms With Iceland’s Taxpayer Vote: Matthew Lynn

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.

Iceland returns to negotiating table on debt repayment dispute

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.

UK, Iceland in Contact on Icesave, No New Meetings

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.

Iceland faces Icesave cash squeeze

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.

Iceland's bank debt is 'bilateral issue', EU commission says

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.,extra-icelands-bank-debt-is-bilateral-issue-eu-commission-says.html

British, Dutch propose new Icesave deal

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.

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