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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.


New York Court to Go Over Glitnir Bank Damages

After the New York court handling the complaint filed by Glitnir Bank’s winding-up committee against seven individuals and PricewaterhouseCoopers had dismissed the case December 2010, the same court now changes mood, nodding to conduct another hearing of both sides.

PricewaterhouseCoopers has been implicated in the overstatements of Glitnir’s financials during the lead up to its collapse, along with Landsbanki, hiding the ailing financial position of the banks from investors. InAudit, Switzerland website. 24-Feb-11.

http://inaudit.com/audit/external-audit/new-york-court-to-go-over-glitnir-bank-damages-5108/

Banks just too big to fail? Iceland shows otherwise

Decision to let banks go under looks smarter by the day, in contrast to Ireland's costly bailout . .On his second day as head of Iceland's third-largest bank, Arni Tomasson faced a crisis: the firm that regulators had asked him to run was out of cash.

It was October 8, 2008, at the height of the global financial meltdown and Iceland's bank assets in Britain had been frozen. Customers flocked to branches of Tomasson's Glitnir Banki to withdraw money, even though the Government had guaranteed their deposits. By the end of the day, the vaults were empty, says Tomasson, recalling the drama.

The only way Glitnir and other lenders could avoid a panic the next morning was to get more cash, which they were having trouble doing. A container of crisp kronur sat on the tarmac at Reykjavik's airport awaiting payment.

The British company that printed the bills, De La Rue, was demanding sterling, and the central bank couldn't access its British account. . .

"Iceland did the right thing by making sure its payment systems continued to function while creditors, not the taxpayers, shouldered the losses of banks," says Nobel laureate Joseph Stiglitz, an economics professor at Columbia University in New York. "Ireland's done all the wrong things, on the other hand. That's probably the worst model."  nzherald website.  21-Feb-11.

http://www.nzherald.co.nz/economy/news/article.cfm?c_id=34&objectid=10706907

Mervyn King drawn into fresh row over Icesave collapse

 

• Iceland's former central banker claims King gave assurances UK would not press for guarantee on £5bn of Britons' savings
• Spokesman for King issues denial and says he had been urging country 'for months' to shrink its banking system

A bitter war of words between Bank of England governor Mervyn King and his former counterpart in Iceland is threatening to reopen old wounds from the Icesave scandal, in which billions of pounds of British deposits were ensnared in the north Atlantic island's financial meltdown just over two years ago.

The row comes at a sensitive time in the Icesave saga as Icelandic MPs are scrutinising a controversial bill outlining terms under which Iceland would repay foreign governments that picked up the tab for retail deposit guarantees.  23-Jan-10.

http://www.guardian.co.uk/business/2011/jan/23/icesave-banking

 

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.

http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16568&ew_0_a_id=372730

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.

http://www.bbc.co.uk/news/business-12195573

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.

http://www.thisismoney.co.uk/news/article.html?in_article_id=520154&in_page_id=2&position=moretopstories

 

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.

http://www.icenews.is/index.php/2010/12/10/pricewaterhousecoopers-criticised-in-landsbanki-crash-report/

Iceland draft deal with Britain said ready

(Reuters) - Iceland's business lobby said on Tuesday it had seen the outline of a draft deal on repaying Britain and the Netherlands and that it was much improved from one rejected by voters in March. . .

. . . which would involve Iceland repaying 40-60 billion Icelandic crowns (224 million pounds) to the British and Dutch.

That is much lower than the $5 billion (3 billion pounds) that the governments paid out to investors in high-interest Icelandic bank accounts though it is understood that a big portion of the debt could be covered by a sale of assets in failed bank Landsbanki.

The Dutch and Icelandic finance ministries said no deal had been reached but that progress was being made. 16-Nov-10.

http://uk.reuters.com/article/idUKTRE6AF3M320101116

Iceland's Ex-Premier Defends Innocence in 2008 Crisis

Iceland's former Prime Minister Geir H. Haarde defended his role in the 2008 implosion of the island's financial system after a parliamentary committee recommended he be indicted for "violations" of his duties. . .

The committee of nine lawmakers was appointed in April after a separate commission investigating the causes of the 2008 crisis found that the government, central bank and financial regulator had all been "negligent" in their failure to address some of the factors that exacerbated the collapse. . .

A special prosecutor appointed to investigate the banking collapse is still probing the three lender' records. Three Kaupthing executives were arrested in May and released after spending as long as 12 days in solitary confinement.  . .

The committee also found that Haarde should be indicted because he failed to ensure that Landsbanki created a U.K. subsidiary when selling its Internet Icesave accounts there -- a measure that would have forced the British government to cover depositor claims, it said.  Bloomberg Buisness Week
Mon, 13 Sep 2010
article reprinted on Sott.net [Quantum Future Group, ISA] website - 18-Sep-10.

http://www.sott.net/articles/show/215270-Iceland-s-Ex-Premier-Defends-Innocence-in-2008-Crisis
 

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