Looks like someone may have some explaining to do...

ukdickie31

http://news.bbc.co.uk/1/hi/uk_politics/7663596.stm

BBC website today.

The government was warned about the possible collapse of Icelandic banks in July but did nothing about it, a Lib Dem Treasury spokesman has said.

dkmax_2

ukdickie31 wrote: »

http://news.bbc.co.uk/1/hi/uk_politics/7663596.stm

BBC website today.

The government was warned about the possible collapse of Icelandic banks in July but did nothing about it, a Lib Dem Treasury spokesman has said.

Anyone with half an eye on the global situtation knew that Iceland was in a very bad way at least two years ago. The IMF warned about it, Independent economists warned about it. Just Google back through the old reports.

Gordon Brown just shrugged them off repeatedly. He is the guy that allowed this crisis to continute to the point it got to - and some people here think he's their champion!

confused_landlord

dkmax wrote: »

Anyone with half an eye on the global situtation knew that Iceland was in a very bad way at least two years ago. The IMF warned about it, Independent economists warned about it. Just Google back through the old reports.

Gordon Brown just shrugged them off repeatedly. He is the guy that allowed this crisis to continute to the point it got to - and some people here think he's their champion!

While I am not a big fan of Gordon Brown, I am not sure what he could have done. Had he been more proactive and alerted depositors of the risks, the same situation would have occurred only he would be held responsible for causing a run on the bank.

dkmax_2

Icelandic banks pose a global risk (April 2008)

http://www.efinancialnews.com/usedition/index/content/2450351129

1echidna

It is a bit like the 'alarmist' here on this site (who is warning that all banks will fail). I personally don't have much respect for smarta*ses who emerge out of the woodwork after the event crowing that they told you so. Make your warnings if you like but don't try to make political capital on them after the event when people are struggling to cope with unprecedented circumstances.

dkmax_2

confused_landlord wrote: »

While I am not a big fan of Gordon Brown, I am not sure what he could have done. Had he been more proactive and alerted depositors of the risks, the same situation would have occurred only he would be held responsible for causing a run on the bank.

Are you suggesting that all badly run banks should be allowed to continue until they collapse? You have to bite the bullet at some point and say, hang-on this isn't right. They could have gently reminded people that the passported banks did not have full protection and washed their hands of it. Quite why people were still rushing to make deposits even after Glitnir is unclear to me.

This is from Fitch's report on Iceland in 2006;

Fitch says that while all the signs of economic overheating – rising inflation, rapid credit growth, buoyant asset prices, a steep current account deficit and escalating external indebtedness – have been evident for a while, the rate at which some of these indicators has deteriorated has exceeded the agency’s expectations. Thus, credit growth of over 30% per annum continues unabated, the current account deficit expanded to 15% of GDP in 2005 and net external debt has climbed to well over 400% of current external receipts.
...
However, the rest of the economy is significantly indebted now: credit to the private sector – much of it price or exchange rate linked – stood at an estimated 218% of GDP at end-2005, having doubled in three years. Yet Icelandic banks and corporates continue to pursue ambitious expansion plans abroad, accumulating external debt at an unprecedented rate in the process.

The writing was on the wall two years ago and it played out exactly as predicted.

danny69

ukdickie31 wrote: »

http://news.bbc.co.uk/1/hi/uk_politics/7663596.stm

BBC website today.

The government was warned about the possible collapse of Icelandic banks in July but did nothing about it, a Lib Dem Treasury spokesman has said.

Yes, yet because savers will get their money back, this will win them many votes. As someone else said, it was clear for all to see 2 or 3 years ago that Icelandic banks were risky. warnings have been ignored by savers looking out for the best rates as opposed to looking for a safe place for their money. They werent 'shrewd' putting their money in Icelandic banks. Their money would have been just as 'safe' putting it on a horse.

dkmax_2

1echidna wrote: »

Make your warnings if you like but don't try to make political capital on them after the event when people are struggling to cope with unprecedented circumstances.

Some people confuse unprecedented with unpredictable. Sure it has never happened before but this scenario was predicted in the popular press and via countless official warnings.

Brown had the opportunity to take steps when it mattered - if only to put a cap on domestic borrowings, put a ceiling on mortgage loans etc. This would have lessened the damage. He chose not to do this for his own political gain - he perpetuated the myth that 'boom and bust' was over and that the economy was doing well. It isn't us playing politics now - it was him playing politics then and now.

adecor

Out of curiosity does anyone know how many of these councils are run by conservatives or liberals?

dkmax_2

Moneyweek 2006;

The very fact that the Icelandic economy is in turmoil should, however, act as a timely reminder to many investors regarding the risks associated with investing in high yielding emerging markets generally

http://www.moneyweek.com/news-and-charts/economics/is-iceland-facing-a-meltdown.aspx

dkmax_2

adecor wrote: »

Out of curiosity does anyone know how many of these councils are run by conservatives or liberals?

Do you believe investment decisions are made by elected councillors? I would have thought this area was managed by financial civil servants guided by recommendations from central government.