Iceland and Gordon's rant.

sorry ignore my last. You're referring to Icesave. Too bad.

Well I think there were plenty of recent warnings in the popular and "quality" press in time to withdraw instant access funds. Also BBC Working Lunch 6 months ago flagged up the Icesave "passport" protection. I took out my instant access money then. However the problen for many people is fixed-term accounts. Will never again open a fixed-term account.

encouraging to see Gordon

No, that is not true. Landsbanki was moving funds into Icesave in order to strengthen it. The rest is just a part of the Brown/Darling smearing campaign. The fund will be paid back, that had been made clear some time ago.

Iceland is not near bankruptcy but things are not made any easier by the actions of the British government, they destroyed the company. When you have friends like that who needs enemies?

It will all be paid back as the Icelandic government said many days ago!

encouraging to see Gordon

That's not what they told the Chancellor.

"The Icelandic government, believe it or not, have told me yesterday they have no intention of honouring their obligations here,"

--Alistair Darling, speaking last Wednesday.

This is what Icelandic Prime Minister Geir Haarde said last Monday:

"There is a very real danger, fellow citizens, that the Icelandic economy, in the worst case, could be sucked with the banks into the whirlpool and the result could be national bankruptcy."

After listening to that, who could possibly conclude from his remarks that the country was "not near bankruptcy"?

They actually said quite the opposite.

Chris

is encouraging to see Gordon

Yes, they did. For some reason he chose to misunderstand them or just ignore them to further his own aims.

Ministry officials here in Iceland went over the tapes (the conversation was recorded) and there was nothing there that could be interpreted in the way that Alistair Darling did. No one in Iceland said that the obligations would not be met. And Icelandic and British officials are going over the details of that here in Reykjavik as I write this. The agreements with the Dutch have already been finished.

Bad translation, what he said was that if nothing was done there would be great danger.

See above, the state of Iceland has almost no debt.

No, they did not. You are just being fed bad journalism and jingoistic propaganda.

s encouraging to see Gordon

Alright, so where is my money then? And why did Treasury officials have to go to Iceland to negotiate?

is encouraging to see Gordon

The officials are meeting to discuss how and when this is paid, not if it will be paid. The Icelandic banks own considerable assets in the UK and those assets will be used to cover the claims.

it is encouraging to see Gordon

Can you point me to the Icelandic governments original statements? Can you explain why is it that Landsbanki is continuing to operate happily in Iceland and only the UK and Dutch customers have to wait for their money? Furthermore, if everything is fine, why does the Icelandic government need to borrow money from the Dutch to compensate the Dutch savers? (Before you call this a lie, it comes from the Icelandic government's webpage.)

, it is encouraging to see Gordon

istic, however,

to be experts

l Money pages,

The Landsbanki is not operating any more, a new bank has been built up that has taken over the operations of the old one. The original statements of the Icelandic government are available but as they are in Icelandic I am not sure if they are of much use to you. Iceland does not have this sort of money at hand (the income from the Icesave accounts was used to finance loans to businesses, mostly in the UK and the rest in other enterprises outside of Iceland) so the money is borrowed to repay the savers before the assets of the banks are sold. The original intention was to reclaim the assets of the banks and then pay out to the savers but now it will be done the other way around.

You can't be serious. The country is up to it eyes in billions of US$ in debt and is still looking for more huge loans to pay off what they already owe. And if you claim that's just something made up by journalists I can tell you with absolute certainty on a personal note that they owe me more that £60,000. If you have no debt then why have you frozen my accounts and are refusing to give me my money back?

Chris

I have not frozen your accounts and neither has the Icelandic state. The Landsbanki was running the Icesave accounts and they have frozen them. The state of Iceland is working out ways to recover the (considerable) assets of the bank and pay those that have not got their money back. (it is not helped by the UK freezing those assets) The state of Iceland is borrowing money to accerlate this process now but the assets of Landsbanki are expected to cover most of the debt. Before taking those loans the state of Iceland was basically without debt.

I have not frozen your accounts and neither has the Icelandic state. The Landsbanki was running the Icesave accounts and they have frozen them. The state of Iceland is working out ways to recover the (considerable) assets of the bank and pay those that have not got their money back. (it is not helped by the UK freezing those assets) The state of Iceland is borrowing money to accerlate this process now but the assets of Landsbanki are expected to cover most of the debt. Before taking those loans the state of Iceland was basically without debt.

But the State of Iceland guaranteed savers' deposits up to a level of around £16,300.00 they therefore should have had enough cash available to cover that guarantee. They should not have to be relying on the assets of the bank itself to cover that obligation. What if the bank had collapsed owing millions in debt. How would the Icelandic State have fulfilled its legal obligations to depositers then?

Ret.

The bank collapsed owing millions in debt, that is what the whole thing is about. The debt of the bank was larger than the GDP of Iceland so there was no way that Iceland could have that much cash lying around.

The bank collapsed owing millions in debt, that is what the whole thing is about. The debt of the bank was larger than the GDP of Iceland so there was no way that Iceland could have that much cash lying around.

So you therefore agree that Iceland as a country is bankrupt? If it cannot meet its legal financial obligations (which it clearly cannot) then it is indeed bankrupt!

Ret.

Iceland is meeting its legal obligations so it cannot be bankrupt.

Iceland is meeting its legal obligations so it cannot be bankrupt.

AIUI - it is only meeting its financial obligations to Icesave savers following the offer of financial assistance from the UK FSCS. In other words, instead of the UK Icesave savers having to reclaim their deposits from the UK FSCS (with all the complications that would mean), the FSCS will, instead, give the money to Landsbanki to enable it to unlock its UK customer accounts and enable them to withdraw/transfer their cash. This is clearly an easier and less complicated procedure although clearly safeguards will have to be written in to the agreement. Don't want Landsbanki pocketing the FSCS cash and still not unlocking its accounts do we?

Look, I'm not having a go at Iceland - clearly the country is in one hell of a mess and your financial regulators have done an even worse job than those in the rest of the world. At least the governments of other countries have been in a position to bail out their banks that have got into trouble. The problem for Iceland is that it has allowed its banks to get into such serious trouble that the amount owed dwarfs the ability of your country to repay it and meet its legal obligations. You are having to trawl around the world, cap in hand, requesting a bail-out and that, effectively, means that your country is bankrupt. You cannot avoid the obvious!

At the moment I am extremely angry. Landsbanki has taken my money and is refusing to allow me to withdraw it. Not only that, but it is breaking its agreement with me and not adding any interest to my savings after 8th October.

Ret.

...

The assets of the banks are considered sufficient to cover their liabilities, the thing is that the UK government has frozen these assets, making them thus unavailable, hence the loan.

Iceland is not requesting a bail-out, we are simply trying to do the right thing here and are being hindered by the British government.

Iceland has acted like a hedge fund. Take them at their word and sell Iceland to the highest bidder.

FoFP

The assets of the banks are considered sufficient to cover their liabilities, the thing is that the UK government has frozen these assets, making them thus unavailable, hence the loan.

Iceland is not requesting a bail-out, we are simply trying to do the right thing here and are being hindered by the British government.

If you are not requesting a bail-out - why have you gone cap-in-hand to the Russians? The UK gov't froze the assests of Landsbanki in the UK because attempts had begun to withdraw those assets back to Iceland with no guarantee that the funds returned to Iceland would be used to repay UK investors. Freezing those assets until guarantees were in place was the only sensible move. You cannot argue that the Icelandic gov't would not favour Icelandic savers over other foreign investors in your banks because it has already done that. It has promised that Icelandic savers will be compensated in full for all of their savings (although how it can make that guarantee I don't know), but has not offered the same promise to foreign investors. They are still stuck with the £16,300.00 compensation.

Ret.