The Icelandic authorities have been given an extended deadline to respond to a letter from the EFTA concerning the Icesave dispute.

ESA, the EFTA Surveillance Authority, sent a letter in May detailing that it feels the Icelandic government must pay the Netherlands and the United Kingdom back the minimum contractual amount for the money the two countries spent in compensating customers of the failed Icesave internet bank, run by Iceland’s Landsbanki.

RUV reports that the Icelandic government was given two months to respond to the letter or face possible expulsion from the European Free Trade Association. The original deadline was next Monday, but has now been extended to the beginning of September – possibly because of ongoing negotiations between the three countries involved.

Iceland has always expressed its intention to pay, but the EFTA wants to know when. [Ends]  24-July-10.

http://www.icenews.is/index.php/2010/07/24/efta-extends-iceland-icesave-deadline/

Representatives of Iceland, Britain and the Netherlands met in Reykjavik this week to prepare further talks on a new repayment deal to cover the collapse of the Icesave bank, the Icelandic government said Friday. . .

"The purpose of the meetings was primarily to exchange information and to prepare further talks later this year," it said, pointing out that "this is the first time the parties meet since the talks were adjourned on March 5."  02-Jul-10.

http://uk.finance.yahoo.com/news/iceland-british-dutch-officials-try-to-revive-icesave-talks-afp-61b18461a966.html?x=0

It’s as if Icesave has completely evaporated from the agenda in the three countries involved – Iceland, the UK and the Netherlands – but the accounts haven’t yet be settled. Iceland still owes money to the UK and the Netherlands as the two countries compensated the deposit holders according the EU insurance guarantee regulation.

The IMF has recently passed fund’s programme on Iceland to the next level. The prerequisite had been to solve the Icesave dispute – since it is a major economic variable – but Iceland found a way to satisfy the fund’s demand though nothing has been resolved. As so often, Iceland seems hell-bent on wriggling out of the Icesave fetters rather than solving the matter. It remains to be seen how the matter evolves now that there is a new government in place in the UK. Sigrúm Davidsdóttir's Icelog Blog - 19-May-19.

http://uti.is/2010/05/does-anyone-remember-icesave/

The former chief executive of Singer & Friedlander is preparing to take the Financial Services Authority to judicial review over its refusal to hold an inquiry into the failure of the Icelandic banks. Tony Shearer, who led the 100-year-old City investment bank before it was taken over by Kaupthing in 2005, accuses the regulator of not doing enough to prevent the crash that cost the British taxpayer £8bn and left hundreds of UK savers out of pocket. . .

Mr Shearer has written to Gordon Brown, the Prime Minister, Lord Myners, the City minister, and Lord Turner, chairman of the FSA, asking for a formal inquiry into why all the warning signs about the instability and potential criminal activity at Kaupthing were ignored. . .

However, the FSA has washed its hands of responsibility for the bank's activities in London before the crash, claiming that it was powerless to act when the home regulator in Iceland was meant to be monitoring Kaupthing.

Lord Turner has told Mr Shearer that he sees no need for a public inquiry, adding "there is nothing further to be gained from further exchanges on the subject of Icelandic banks and our past regulation of banks generally".

Hundreds of UK-based savers with Kaupthing in the Isle of Man and Landsbanki in Guernsey have still not been fully compensated for their losses, while dozens of British councils, hospitals and charities are also waiting in line with commercial creditors.

"The papers have reported that you have called for the FSA to carry out a special investigation into Goldman Sachs," Mr Shearer wrote to Mr Brown. "Will you now call for the FSA to carry out and publish such an investigation into the activities in the UK of Kaupthing and the other Icelandic banks? 09-May-10.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7701701/Court-to-review-FSA-role-over-Icelandic-bank-collapse.html

Savers with Landsbanki Guernsey who lost money during the Icelandic banking crisis have welcomed a report from a Commons committee which criticised the UK government's handling of the situation.

The Justice Committees report on the relationship between the UK, Guernsey and the Isle of Man highlighted the role played by the UK Treasury in representing the interests of the crown dependencies during its negotiations with Icelandic authorities during the crisis, and concluded that the UK had failed to look after the interests of Guernsey adequately.

Landsbanki Guernseys parent company went into administration in 2008, and Guernseys savers were amongst the worst hit of the crisis.  23-Apr-10.

http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/7568381/Commons-report-supports-Landsbanki-savers.html

The Financial Services Authority (FSA) was blanked and bluffed by Icelandic bankers for months over the ticking Icesave time bomb.

A 2000-page Icelandic report into the 2008 banking crisis which almost bankrupted the tiny island country reveals the behind-the-scenes talks between the FSA, the Icelandic government and Landsbanki. It shows the FSA waited seven months before pulling the plug on Landsbanki, of which Icesave was the online savings arm, despite being faced with mounting evidence that the bank was not strong enough to survive. 21-Apr-10.

http://www.citywire.co.uk/adviser/-/features/other/content.aspx?ID=394796

Sir - In 2005 as chief executive of Singer & Friedlander I explained to the Financial Services Authority why the Icelandic bank, Kaupthing, should not be allowed to take over Singer & Friedlander as its management was not "fit and proper", and so did the rest of the board. We were all ignored.

On Tuesday after the Icelandic parliament published its Truth Report into the collapse of the Icelandic banks, including Kaupthing, I wrote to the chairman of the FSA pointing out the report makes it clear that the whole Icelandic banking and regulatory system had failed massively. The honesty of the report is in stark contrast to the attitude of the FSA and the Treasury, which have refused to explain how they could have done so little, while letting these banks operate in the UK.

Did the FSA and the Treasury realise how badly run and regulated the Icelandic banks had been? And if they did, why didn't they do anything? If only they had done something many UK depositors and taxpayers would have been spared a great deal of pain, as would the whole of the Icelandic community.  [Signed] Tony Shearer.  Finance Comment pages, Telegraph website 18-Apr-10.

http://www.telegraph.co.uk/finance/comment/7604349/Letters-to-the-Head-of-Business.html

The doorstopping official report into the collapse of Iceland's banking system may not make for entirely comfortable reading for the Governor of the Bank of England, Mervyn King, or the Financial Services Authority.

In the Spring of 2008 the Icelandic central bank - the Sedlabanki - made a request to the Bank of England for a currency swap agreement after Iceland had failed to renew a credit line with the Basle-based Bank for International Settlements (BIS).

Mervyn King sensibly refused - after all, Icelandic bank liabilities were five times the size of the nation's economy - and offered some help in reducing the size of Iceland's banking sector.

What happened next is unclear. But we know that between the spring and autumn of 2008, when the Icelandic banks collapsed like dominos, savers' money continued to pour into Icesave and other Icelandic deposit accounts.

The missing piece in this puzzle is what the Bank of England decided to do with its assessment of the Icelandic banks when it refused help. One trusts it informed the other tripartite members - the Treasury and the FSA - which should have been far stronger in warning depositors of the risk.  12-Apr-10.

http://www.thisismoney.co.uk/news/opinion/article.html?in_article_id=502708&in_page_id=19&in_author_id=1&position=moretopstories

Just now the governments of Iceland, the UK and the Netherlands signed an agreement on the repayment scheme of Landsbanki’s Icesave deposits. Negotiations were believed to be at standstill and therefore this sudden solution came as a surprise.

However, negotiations had actually been taken place under a veil of secrecy for weeks—given that this solution is extremely radical they had to be secret, explained Icelandic Finance Minister Steingrímur J. Sigfússon.  01-Apr-10.

http://icelandreview.com/icelandreview/daily_news/?cat_id=29314&ew_0_a_id=360231

A group representing Landsbanki Guernsey depositors said it feels vindicated by a report looking at the island's relationship with the UK.

The Justice Committee's review included evidence of how the collapse of Landsbanki was handled.

A States of Guernsey submission stated the UK government prioritised its own interests over those of Guernsey when dealing with Icelandic authorities.

The depositors agreed their interests were not considered throughout.

Since October 2008 the Landsbanki Guernsey Depositors Action Group has lobbied the States to do more to help them.

Depositors have previously been told by the administrator to expect up to 91% of their money back.  01-Apr-10.

http://news.bbc.co.uk/2/hi/europe/guernsey/8598835.stm