| Criticizes the terrorist legislation |
| Saturday, 04 April 2009 05:30 |
 The enforcement of the terrorist legislation on Landsbanki and Iceland is criticized in a new report of the appropriations committee of the English parliament which will be published today. The committee encourages the English financial supervisory administration to review the legislation and think about if it is a correct reaction to enforce them in similar circumstances in the future. Then the committee calls for a change of the legislation so that the authorities have other resolutions than to enforce the terrorist legislation in incidents like when Landsbanki tipped over. It is inevitable that the enforcement of the terrorist legislation will have negative affect on the image of whomever it is set on. So it would be preferable that the government would have other tools that would not have as serious affect. Kaupthing would have gone into bankruptcy In the report is also a review of the situation that Alistair Darling, financial minister of England, gave to use the terrorist legislation. On October 8th said Darling that the Icelandic government had said that they did not intend to honor their commitments in England. In the report is a reference to a conversation of Darling and Arni Mathiesen, financial minister of Iceland at that time, and it is said that there is nothing there to support the claim of Darling. On the contrary had Arni said that Iceland will try to stand up to it´s commitments in England with the insurance fund of balance owners. Then on the other hand says the parliament committee that nothing was said that disprove the belief of Darling that there would be discrimination against the English balance owners in the Icelandic banks. In the report says that the words and actions of Darling had serious affect on the trust of marketing parties toward Kaupthing, which at that stood alone behind from the three largest banks of Iceland. On the other hand had the committee not seen any documentation that points to that Kaupthing could have been able to avoid bankruptcy even if Darling had not expressed himself as mentioned above. Then it says that with it´s actions had the English government directly infiltrated the financial market and so ceased to be a neautral onlooker. The Icelandic government had not felt that there had been any help in the actions of the English government. Districts not saved Many English parties had deposited their funds into the Icesave accounts of Landsbanki. Amongst them were individuals, charity organizations of many types and districts. In the report of the parliament committee is suggested that the government pays the charity organizations back thefunds the organizations had lost in the collapse of Icesave. The committee puts emphasis on that this will not be a permanent rule,but the situation are now so special that there is reason to step down in unique cases from the main rule about the responsibility of investors of their own actions. In current situations are the charity parties in need for all they have to be able to tend to their services to those who are in difficult situations. On the other hand says the committee that the districts that have lost funds in Icesave, have to take responsibility of the consequenses of their doings. They are obligated to put interest on their funds resposibly. It would be extremely incorrect to reward the districts that had lost funds in Icesave while other districts had taken less risk.
News Article by Bjarni Olafsson Translated by Anya Original Article in Icelandic Trackback(0)
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But it was the correct action as nothing could have saved the Icelandic banks.
The criticism was mainly that the FSA allowed such Kaputhing to buy a UK bank when it was obviously unsuitable to do so in 2006.
You article fails to mention the 10,000 mainly British depositors who have had their protection refused by Iceland. Also, repeating the claim that Iceland would pay overseas depositors doesn't match its actions or statements at the time.
Your article in quite contrast to UK reports.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/5102000/MPs-blame-impotent-FSA-over-Icelandic-banks.html
http://www.ft.com/cms/s/0/75bce9a0-20a7-11de-b930-00144feabdc0.html
Also there is no mention of the EU central bank that caused the actual crash by demand the return of loans at short notice.