Iceland counters alleged attacks

ianmr65

As I predicted in the kaupthing post

http://forums.moneysavingexpert.com/showthread.html?t=826871


That a probable cause of the problems with Icelandic banks is due to speculators betting against the currency, and default spreads, the Icelanders have had enough:

http://www.ft.com/cms/s/0/10f40df2-fea5-11dc-9e04-000077b07658.html

"They also reveal that, having tried to educate international investors about Iceland’s economy with road shows and presentations, the authorities are to step up their response and fight fire with fire"

Expect fireworks, these people are tough.

dadsarmy

Agree about these people being tough. Been there 4 times - 3 by our landrover - they are very hardworking and work very long hours - many have several jobs - 1st or 2nd largest man in the world too and not blubber either

chesky369

I hope they get on with it quickly - I'm sick of reading threads by people panicky about the imminent collapse of ICEsave, both here and on the Motley Fool.

fisher-man_2

I like this bit,

In spite of the weaknesses, Iceland is running a budget surplus, the current account deficit fell from 26 per cent in 2006 and all the banks are by international standards well capitalised and healthy.

ianmr65

chesky369 wrote: »

I hope they get on with it quickly - I'm sick of reading threads by people panicky about the imminent collapse of ICEsave, both here and on the Motley Fool.

I'd lay odds (and i'm not a betting man) on many of these posts being planted by the 'panicky' speculators and dealers who are getting ever closer to having to close out their positions, having lost shedloads.

tonyhamm

I have an icesave account, and the question is are your savings covered by the FSA scheme and what would the delays be? I know the scheme only has 4 billion or so in it, but I am sure the government would top it up as needed. So this is the main thing to worry about as far as I can see. I am sure icesave is ok, but the other banks like Kaupthing have been lending to speculators like hedge funds and people like Robert Tzesnig. Iceland's economy and how great it is or how poor it is, is absolutely NOT the main thing here as its the size of a small english city with just 300,000 people in it. No, the main thing is that the FSA which has headquarters in a very, very expensive building in Canary Wharf, (my company had to move out as the rent was too many millions) thanks to us taxpayers, and whose staff have many perks and long lunches in 5 star resterants all paid for by us taxpayers, has been doing the barest minimum work checking and looking out for depositors by making sure that foriegn Banks who take uk deposits are solid in assets and lending standards and financially grounded and that the foriegn banking system has access to a lender of last resort facility in case of a bank run. I am sure that between courses this has been done and we have nothing to fear. Iceland's economy is not the main matter, as the banking system has lent money outside of Iceland fueling many investments in the UK.

chesky369

Given the many queries about the FSA and its actions lately, perhaps someone should start a special thread about it - not me, I don't know enough.

ianmr65

tonyhamm wrote: »

I have an icesave account, and the question is are your savings covered by the FSA scheme and what would the delays be?

Yes your savings are covered under the FSA / Icelandic passport scheme. Now a lot has been reported, talked about, and alleged, about this.

The fact is no major bank has EVER failed, that was covered by the FSA, so no one actually knows what will happen. Only what the FSA say will happen.

What the FSA say, in a nutshell, and as i understand it, is that it will take them six months, after you claim to pay you.
In icesave's case this will enable them to get the first £16k off the icelandic scheme, and top it up to £35k. And if they can't claim the first £16k, then they will pay it all out themselves. They are not holding a pot of £4bn, to make any payments. At the time of a faliure, they will levy a special charge of all the members of the compensation schem, up to $4bn. Over £4bn they will ask the goverment and bank of england to interceed.

They also say it will take about six months in the case of any UK bank or foreign bank like kaupthing who are full members, to pay out.

tonyhamm wrote: »

No, the main thing is that the FSA which has headquarters in a very, very expensive building in Canary Wharf,....................foriegn banking system has access to a lender of last resort facility in case of a bank run.

Somewhere in all that is a good question.

Is the FSA capable of policing, and supervising banks under it's 'control', either here, or overseas?
There is an easy answer to that. No.

They (The FSA themselves) just admitted that Northern Rock, a small provinicial bank who only had branches in a region of UK, was very badly supervised, by them, and that they failed to ensure due diligance.

What they didn't an d couldn't say, is that the FSA have no chance of ever adequately supervising the banking system, in the UK, in the current circumstances:

1) They are woefully underfunded, and under resourced.

2) They do not have enough regulatory or legal power.

3) The are stuck between the treasurey, and the bank of england, and none of those three bodies has a clear idea of who is reposnsible for doing what, when it comes to policy making, compliance, or regulation.

4) They do not understand at a fundemental level how the capital, derivatives, or credit markets work.

5) Anybody who works for them that's any good, get's poached by a bank, gets a massive pay hike, and is put to work on 'managing' it's regulatory compliance. ie keeping the FSA of the banks back.
Think 'Gamekeeper turned poacher'

4) The banks will not co-operate with them.

5) Even if they find evidence of wrong doing: The policing of fraud; market manipulation; and insider trading:
By the fsa (and serious fraud office and courts) is pathetic. The vast majority of cases do not get prosecuted, and those that do tend to fail.

The fact they have a big building in canary wharf, and take business lunches, is in neither here nor there. I imagine that the banks they 'supervise' pay for all the lunches, and probably rent the building to them on the cheap.

It may re-assure you to know that the Icelandic central bank, and compliance authority, are much more hightly regarded, and are much better at controlling their banks than the FSA. This may have something to do with the fact that the Chairman of the central bank, used to be the prime minister.

chesky369 wrote: »

Given the many queries about the FSA and its actions lately, perhaps someone should start a special thread about it - not me, I don't know enough.

GOOD IDEA, perhaps we could have an FSA sticky!!!

chesky369

"It may re-assure you to know that the Icelandic central bank, and compliance authority, are much more hightly regarded, and are much better at controlling their banks than the FSA. This may have something to do with the fact that the Chairman of the central bank, used to be the prime minister. "
I wouldn't trust Tony Blair with MY £35k.

ianmr65

chesky369 wrote: »

I wouldn't trust Tony Blair with MY £35k.

True. i wouldn't trust Tony Blair with 35p. But then i doubt he would ever be seriously considered as the next governor of the bank of england. Nor Ben Bernake as the next president of the USA.

What i'm saying is that finance is so important to the icelanders that Fiscal and Monetary policy there is (somewhat) more co-ordinated, than here or in the states.