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

Media Reports

This page contains brief summaries of and links to media reports of relevance. Click on one of the topics or the source below each entry to see only reports on that topic or from that source.  See Selected for the media reports that the site editors have selected as the most important or relevant.

Landsbanki to seek two Billion Dollars from Former Owners and Management

The winding-up committee of Landsbanki is now in the final stages of preparing a number of cases against former management and the owners according to Morgunbladid. The amount that the board asks for as reimbursement amounts to 0.75 billon USD (90 billion ISK). The board also asks for eight billion ISK insurance payment, because of criminal activity on behalf of the former management of the bank.

The winding-up committee last summer hired a team of specialists from Deloitte in Britain to investigate the bank before the October 2008 crash. Herdís Hallmarsdóttir, who is on the winding-up committee says that the investigation is making good progress, but is not yet finished. . . .

Two of the three former owners of Landsbanki, Björgólfur Gudmundsson and Magnús Thorsteinsson are now legally bankrupt. The third owner, Björgólfur Thor Björgólfsson, is still liquid. The CEOs of the bank were Sigurjón Árnason and Halldór J. Kristjánsson.  15-May-10.

Investigators preparing Landsbanki white collar crime report

Pall Benediktsson, spokesman for the Landsbanki resolution committee, says that a special investigations team at the auditing company Deloitte has been preparing a report into alleged misconduct at Landsbanki before the crash in autumn 2008.

“There they have professional bookkeeping investigators doing much the same as Kroll for Glitnir. They will hand in their report on their investigation at the next bank creditors’ meeting on 27th May,” Benediktsson told . . .

Benediktsson is unhappy at an article published this week on saying that the Landsbanki committee constantly drags its feet on communicating openly compared to its Kaupthing and Glitnir counterparts. He said it is simply not true that the committee has been withholding information.  15-May-10.

Court to review FSA role over Icelandic bank collapse

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.


Kaupthing executives held by Iceland police

Two former executives of collapsed Icelandic bank Kaupthing were ordered on Friday to be held in police custody while prosecutors consider a criminal case against the pair.

Reykjavik District Court approved a request from the special prosecutor responsible for investigating the Icelandic banking crash of October 2008 to hold former CEO Hreidar Mar Sigurdsson for 12 days.

Magnus Gudmundsson, the former head of Kaupthing's Luxembourg operations, will be held for seven days.

Both men were detained Thursday -- the first high-profile arrests in the wake of the banking crash, which crippled Iceland's economy and forced out the tiny Nordic country's former leaders. . .

Iceland's Special Prosecutor Olafur Thor Hauksson said that Sigurdsson is suspected of falsifying documents and breaking laws on stock trading for personal gain. The Associated Press 07-May-10 ~ Bloomberg Business Week website.


Commons report supports Landsbanki savers

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.


Icelandic bank crisis report shows how slow FSA was to react

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

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.

Letters to the Head of Business: FSA shamed by inaction over Iceland

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 ShearerFinance Comment pages, Telegraph website 18-Apr-10.

Iceland given another $160m by IMF to re-build economy

The International Monetary Fund (IMF) has cleared a $160m (£104m) loan to Iceland that was contested by Britain and the Netherlands.

The money is the latest tranche of $2.1bn in IMF aid to stave off Iceland's financial collapse. But approval got caught in wrangling over claims for compensation for the collapse of the Icelandic bank Icesave.

Release of a further tranche of money brings to £1.2bn the amount of loans that the IMF has extended to Iceland.  16-Apr-10.

Let down by the watchdogs

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.

Iceland has its Truth Report into the financial crisis – now what about one for the UK?

This afternoon, 45 men and women will begin the long task of reciting an astonishing saga of manipulation, deception and the betrayal of thousands of people at a theatre in central Reykjavik.

The unusual story – a 2,000 page political report – will take them four to five days to intone, taking in the events leading up to Iceland's far-reaching financial collapse that saw three banks go down in three days and its currency crippled.

There are already formal criminal investigations into suspected market manipulation, fraud, excessive loans to related parties and tax evasion connected to the banks, Kaupthing, Glitnir and Landsbanki. . . .  Then there are the lessons we can learn about the chronic failure of oversight in the UK that allowed these banks to operate in a regulatory black hole on our soil.

Like my colleague, Lawrie Holmes, I’m dismayed at the contrasting complacency in Britain – how everything appears to have gone back to normal. It’s time to lay bare old City practices

Maybe the UK would need a similar wholesale collapse, rather than a near-catastrophe, for the City to engage in any similar introspection and hand-wringing. But I’d still like to see independent report, or series of reports, snooping into those darkest corners of the British banking system that are undeniably still in the shade and poorly understood by those politicians and taxpayers that stumped up the cash to bail them out.  Rowena Mason - 12-Apr-10.

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