No Solution on Iceland-Britain Banking Dispute

baby_boomer

While we're waiting, and in blame mode, does anyone know what happened to the incredibly knowledgeable ianmr65 who used to fly the flag for Iceland on these boards and provide the factual information to bolster the IceSave supporters as they drove any domb and gloom types from MSE? I wonder if he's been sacked from the IceSave Treasury Dept. yet.

This thread was a classic

Posted by player
Not being an economist myself, but what worries me about Iceland (having money in an icesave account) is when people compare the situation to here in the UK. Iceland is a country with a population of just 300k, surely our economy is far more resilient to the current economic situation?

Posted by Ianmr65
Iceland economy is overheating after years of very strong growth. They have zero budget deficit, a strong economy, geothermal powerstations and alluminium smelters being thrown up at a rate of knots, and three strong and profitable interlinked banks, who have no exposure to sub prime, nor toxic derivatives. with a goverment, central bank, and regulator who all know what they are doing, and coopertae.

The issues with iceland are lack of forrign resevers, high inflation and high intrest rates, and a weak currency. This is partially due to speculation, and partially due to the recent boom. The only real issue with the banks is exposure to the credit markets through their involvement in leveraged european commercial deals. However the banks have been actively seeking and getting forign reserves, in the form of deposits and private bonds and posted strong results, showing them to be well capitalised, and with good ratios.

Compare this with the UK.

We have an economy about to nose dive, vacillation and confusion from the govermenet. regulators who by there own admission, are useless, and a central bank at odds with the goverement, who's attempts to stem inflation are not working. A massive bufget defecit, A housein market that is in freefall, negative equity, and repossesion looming, and a pound that is in freefall against the euro; Rocketing imported inflation we can do nothing about. And a seriously large increase in the money supply over the last two years.
We are a country mortaged up to the eyeballs, living on the never never for thae last ten years, with banks teetering on the brink, cash strapped and not lending, and issuing cash calls right left and centre; and who have still to reveal the true extent of thir sub prime and derivatives losses. All the migrant workers who kept the ecomomy strong by working for peanuts are on their way home. The chinese and indians are not lending us their money to buy their cheap goods anymore, and putting their prices up to boot. The strongest sectors of the economy: finance retail and property are seriously struggling, and we have no manufacturing to speak off.
The best we can expect is a serious recession. The worst is a full scale slump.

On what basis, do you think then, that we have the more resilliant ecomomy?

And finally posted by ianmr65 to round off the thread
I don't think the telegraph articles [raising doubts about Icelandic banks] are rubbish i know they are, search Iceland, on mse for the pages and pages of evidence, you will find many much more highly respected commentators and economists, than the clowns who write for the torygraph, who agree with me.

JayTee99_2

You do get the impression that Iceland is trying to come through this relatively unscathed, with its assets still intact.

Interesting to see that Finland are also intending to use our proposed scheme, although Finland is on a much, much smaller scale, of course.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ax5mCJGCsIcg

Finland has moved to save deposits at the local unit of Iceland's Kaupthing Bank hf, which collapsed on Oct. 9. Local banks agreed to give a loan with Kaupthing's assets as collateral.

The loan will enable the bank to repay its Finnish customers their 115 million euros worth of deposits and accrued interest in full, Finland's Financial Supervision Authority said on Oct. 20.
The Finnish parliament will today vote on government guarantees against possible legal action arising from the arrangement. If passed, depositors may get their money back as soon as a week, Hakkarainen said.

also, Germany did similar with Kaupthing's assets
it's a convenient red herring for Iceland to hide behind when they blame UK govt for their downfall.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8CtcaSIFLgY

Germany's financial-services regulator BaFin ordered the German unit of Iceland's Kaupthing Bank hf on Oct. 9 to stop selling assets or making payments to preserve remaining assets.

.

bristolleedsfan

baby_boomer wrote: »

While we're waiting, and in blame mode, does anyone know what happened to the incredibly knowledgeable ianmr65 .

Last posted on 20th October.

http://forums.moneysavingexpert.com/showthread.html?t=1216345&page=3

baby_boomer

JayTee99 wrote: »

Germany did similar with Kaupthing's assets [on 9 October]
it's a convenient red herring for Iceland to hide behind when they blame UK govt for their downfall.

But these actions took place after we the UK government had taken the precipitous first step which guaranteed an end to Kaupthing.

On 9 October Kauthing ceased trading on the stock market and was taken over by the Icelandic FSA at the same time as the whole board resigned.

These actions by others were right at the end of the road.

JayTee99_2

to baby_boomer

We clearly don't know the content of the early talks that happened between Alastair Darling and Iceland, but the fact that Iceland are now leaking transcripts of part does seem to indicate mistrust.

Alastair Darling was quite obviously under pressure from other quarters at the time, but was obviously fuming with Iceland, as was Gordon Brown, which suggests the pre talks had not gone well and left them with no choice but to freeze assets.

If it comes down to whose word do you take, Haarde's or Darling's, then for me it's a no-brainer

meunier

Forgive me if this is simplistic, but I do have a question: While realising how vitally important it is for Britain to maintain its arm in terms of an ultimate legal battle with Iceland to force them over the long-term to honour their original committment, might it not be possible (indeed desirable) for HM Treasury and the FSCS to join together and pay out the DIFFERENCE (e.g., those amounts OVER the passport scheme commitment due by Iceland) to UK savers? Surely any court (as I fear this is where this is heading) will see such an action not only as the UK's willingness to honour commitments (much as it appears other countries like Finland have evidenced), but also this would, perhaps, reduce a fraction of the pain and suffering currently being experienced by the same UK savers as evidenced on this board and other similar ones.

Forgive me if this is too simplistic a suggestion.

baby_boomer

Well worth raising as a suggestion, but...

In political terms, this could be perceived as paying out to "fat cat" savers who didn't have a full guarantee, in advance of the "small saver" Labour is supposed to care more about.

No offence to anyone intended, but this is how some journalists would spin it and Labour ministers genuinely wouldn't feel good about it.

To avoid further controversy it's going to have to be:

"All for one, and one for all".

meunier

Certainly I can understand this, Baby_Boomer, but surely the situation with Iceland would make the payout at this juncture to everyone of all understandably impossible. To those with more than that limit it would but show an element of good will on behalf of all and, indeed, I would hope put further pressure on the Icelandic authorities to sign an agreement as soon as possible.

meanmachine_2

meunier wrote: »

Certainly I can understand this, Baby_Boomer, but surely the situation with Iceland would make the payout at this juncture to everyone of all understandably impossible. To those with more than that limit it would but show an element of good will on behalf of all and, indeed, I would hope put further pressure on the Icelandic authorities to sign an agreement as soon as possible.

You couldn't pay those with more in their accounts first. As pointed out, that would play extremely badly.

What's going on is that the UK are trying to make Iceland obey international law, or at least give them the clothes that make them look like they're obeying the law.

That must come first, even if it's a sham and we're actually paying Iceland to do it.

Right now Iceland appear to be stalling in order to get their grubby mitts on those 4billions of frozen assets - due to return to Iceland within days.

It's all very cynical and very depressing stuff.

clarkkento

StevieJ wrote: »

What about the people who have deposited over the 35k covered by the guarantee what word do you have for them?

I say I know exactly how you feel as I am one of them.