No Solution on Iceland-Britain Banking Dispute

T'Pau

meanmachine wrote: »

I think we can guess the update:

"We are doing everything we can to keep you from your money. See? Clear difference from every other bank in the entire world. Suckers."

'Furthermore the Pope is a Catholic and bears shît in the woods.'

baby_boomer

harrowing wrote: »

In theory just because there's a run on a bank does not stop the remaining customers being repaid, does it?

Unfortunately banks do much more with our money than just hang onto it. That's why they are able to pay us decent interest when things are going OK.

All around us asset classes are collapsing e.g. property, shares, corporate bonds, even gilts and commodities.

Forced sales of assets are rarely a good idea even at the best of times.

Any Icelandic assets held by the bank have been trashed by the collapsed of their currency.

cloud_dog

McElais wrote: »

No to both, but what the Icelandic Minister actually said was:

“We have the [deposit] insurance fund according to the Directive and how that works is explained in this letter and the pledge of support from the government to the fund.“

This is quite different from:

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

Full details here: http://ftalphaville.ft.com/blog/2008/10/24/17401/iceland-the-darling-tapes/

All due respect re-read the text and read between the lines. Count the number of times the Icelandic minister refers to resolving the local situation first, and also the umm we'll yes the protection fund does not have sufficient money to actually bail everyone out, then go back to the we need to resolve the local situation first and the rest of you can wait and see.

I read it how Darling did - perhaps I'm just more synical. :rotfl:

baby_boomer

But as Nat Rothschild might have said to George Osborn, these were private and ongoing discussions - even before we throw in the question of interpretation.

shindigger

cloud_dog wrote: »

All due respect re-read the text and read between the lines. Count the number of times the Icelandic minister refers to resolving the local situation first, and also the umm we'll yes the protection fund does not have sufficient money to actually bail everyone out, then go back to the we need to resolve the local situation first and the rest of you can wait and see.

I read it how Darling did - perhaps I'm just more synical. :rotfl:

Its clear Darling and Brown actually called this right.
Iceland have pulled the rug on the UK.

Count_Dante

The clear thing I read from the transcript was that the Icelandic guy pointedly refused to give a cast-iron guarantee that the money would be paid. I did get the impression that he would try his best to honour the commitment some time in the future (whenever that would be), but that is not the same thing.

London05

lCJ wrote: »

Hi folks, just talked to Icesave they say an announcement is going to be posted on their website this afternoon. They would not let slip any info on content so i suppose we wait and see.......

I thought this afternoon started at noon plus 1 minute - no info yet - maybe a Russian Billionaire has bailed them out - Vodka anyone:beer:

McElais

cloud_dog wrote: »

All due respect re-read the text and read between the lines. Count the number of times the Icelandic minister refers to resolving the local situation first, and also the umm we'll yes the protection fund does not have sufficient money to actually bail everyone out, then go back to the we need to resolve the local situation first and the rest of you can wait and see.

I read it how Darling did - perhaps I'm just more synical. :rotfl:

I'm not saying Darling was wrong, but just pointing out that things weren't as black and white as we were led to believe.

Compensating their own citizens first might be morally wrong, but not illegal insofar as EC Directive 94/19/EC is concerned.

The details of the protection fund are publicly available (in fact they were published via a link on the Icesave website):

http://www.curioweb.is/webs/tryggingasjodur.is/modules/files/file_group_26/DIGF%20Information.pdf

Note that it states:

“The Fund is pre-funded and post-funded if needed, as is the general setup across Europe. If the total assets of the Fund prove insufficient, the Fund may borrow funds in order to compensate losses suffered by claimants.”

Post-funding is the only option for Iceland in a crisis of this scale hence the UK's offer of a £3bn loan to allow Icesave depositors to be refunded. My understanding of why this offer has been rejected is because our government has demanded that Landsbanki’s assets in the UK be used to cover general Landsbanki's debts in the UK in addition to what it owes Icesave account holders. The Icelandic authorities want to restrict their liability to Icesave account holders only.

So, rightly or wrongly, it seems that it is our government that is holding out for a better deal (i.e. by insisting that Landsbanki's UK assets are used to cover debts other than Icesave a/c holders).

cloud_dog

McElais wrote: »

So, rightly or wrongly, it seems that it is our government that is holding out for a better deal (i.e. by insisting that Landsbanki's UK assets are used to cover debts other than Icesave a/c holders).

Not sure its a better deal merely that the Icelandic Government commit to their promises / obligations under the Passport scheme.

(We'll just agree to disagree ftm).

cloud_dog

Bromley86

Don't forget that Oddsson said the same thing (in Icelandic) and Haarde likewise but in English interviews. So there's no miscommunication here - you've got Prime Minister, Finance Minister and the governer of the central bank all saying the same thing - we can't promise you'll get your £16k back (and there's almost no chance of getting any more than that).

The real surprise is that they were so honest about it. Would it really have killed them to make reassuring noises about being able to cover the £16k? Looks like cloud_dog is going to have to emigrate to Iceland, home of the honest (if a little dim) politician .