A DAMNING account of Iceland’s failure to protect ordinary depositors – including hundreds of thousands in the UK – who entrusted their savings to online bank Icesave will be published today by a specially convened truth commission, set up in the wake of Iceland’s banking meltdown 18 months ago.
A 2,000-page report into the system-wide financial collapse in October 2008, commissioned by Icelandic MPs, will contain detailed chapters on both the Icesave affair and Iceland’s pitiful depositor guarantee fund. Former ministers and regulators responsible for ensuring deposit guarantees were sufficiently robust are expected to face severe criticism. Guardian Service on Irish Times website - 12-Apr-10.
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.
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.
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.
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.
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.
The Guernsey financial regulator has told consumers it is up to them to read banks' financial accounts to check if it is safe to deposit their savings.
Offshore savers are financially sophisticated and should be expected to study the finances of the island's banks to see it they are safe, according to the Guernsey Financial Services Commission (GFSC). The warning comes after the collapse of Landsbanki Guernsey in October 2008, which streamed money backed to its parent onshore bank leaving its offshore savers out of pocket. . .
The advice from the GFSC has been ridiculed by one offshore saver. ‘It begs the rather obvious question: what on earth is the regulator for, if they're telling the public ‘figure it out for yourself.' 12-Mar-10.
After the one-sided Icesave-vote last weekend not much has happened officially. The Icelandic government has stressed that the dispute must be put to a rest as soon as possible. The opposition leaders have said that unless an acceptable accord is reached they will not go along with an agreement. This has lead to declarations by Prime Minister Jóhanna Sigurdardóttir that the government might try to finish the negotiations alone. This declaration has a hollow ring, considering that the government has in fact been sent back twice because of widespread opposition. . .
So the question is. How can this be ended? Both the British and the Dutch government know that payment will take years as Alistair Darling said in an interview on Sunday. The burden of the payment will be carried by the now defunct Landsbanki, which should rightfully pay anyway. The dispute turns around a government guarantee for the full amount with interest. 12-mar-10.
LANDSBANKI Guernsey depositors are the worst-affected by the Icelandic financial crash, and Iceland may now never re-compensate [sic] the UK, it has been claimed.
Hundreds of thousands of Iceland residents have joined an insurrection proposing that the UK and Netherlands, which lent the country the money to bail out foreign savers when Landsbanki collapsed in October 2008, should not be recompensed.
Over the past year they have become increasingly unhappy about bearing this cost saying it will make their already huge debt impossible.
An article in the Sunday Telegraph business section yesterday said that of all those affected, one group of Channel Islanders was hit hardest.
‘But the worst affected people – even more so than Icelandic and British taxpayers – are the 800 savers in Landsbanki Guernsey who lost access to their entire life savings,’ said business journalist Rowena Mason.
‘They were not covered by the UK Government’s bail-out,’ she added. 08-Mar-10.
[See referenced Telegraph article by Rowena Mason HERE.
When one of the billionaires behind the collapsed internet bank Icesave was asked in a new film what happened to all the money, his answer was astonishingly nonchalant.
"A lot of money goes to money-heaven," shrugged Björgólfur Thor Björgólfsson, the London-based investor who co-owned 41pc of Icesave's parent bank, Landsbanki.
"The value that has been wiped off the stock markets, and the deposits in the banks and investment funds have gone. They have evaporated. It's a common misunderstanding to ask, 'where did the money go'?" . . .
Public outrage has been brought to a peak by the fact that there are now 43 cases of alleged criminal activity under investigation in connection with the country's scandal-hit financial institutions, including Landsbanki, and, in the country's first referendum, the 320,000 people of the island were expected to vote against a deal to compensate the UK and the Netherlands for the failure of Icesave. 06-Mar-10.