More Icelandic bank gossip on Working Lunch

shindigger

nilrem wrote: »

TBH I thought I was being observant, it did not alarm me and I have considerable savings in Icesave but I am sure that some 'edgy' savers might have been put off saving with Icelandic banks by the comments from the viewer who appeared and commented that in the case of a failure he would not live long enough to get his cash back from Iceland!

As I say I was not trying to alarm people but I felt people might be interested in what they said.

That bloke was a total muppet. If he had any sense, and had learned ANYTHING from Northern Rock, its this:
SHUT THE F**K UP!! man.:mad:

DocProc

Taken from http://www.ft.com/cms/s/0/2c6e0a1e-0059-11dd-825a-000077b07658.html?nclick_check=1

Iceland threatens direct markets intervention

By David Ibison in Reykjavik
Published: April 2 2008 03:00 | Last updated: April 2 2008 03:00

Iceland is prepared to order direct intervention in the currency and stock markets in an attempt to punish international hedge funds that it claims are attacking its financial system.

Geir Haarde, the country's prime minister, said: "We would like to see these people off our backs and we are considering all the options available." Mr Haarde declined to be specific, saying "a bear trap needs to be a surprise".

Action was needed, he said, because the country's financial system and currency were being unfairly and perhaps illegally weakened by hedge funds "who just want to make a profit by hook or by crook".

"The central bank and the government have several means at their disposal to influence this situation and we have not used all of them yet," he told the Financial Times in an interview.

His comments were made as international pressure on Iceland intensified after Fitch Ratings and Standard & Poor's cut their outlooks for Iceland's sovereign credit rating to negative. Both cited concerns the government might have to support the country's banks to avert a possible financial crisis.

S&P said that the move "reflects our lack of information regarding the Icelandic government's official strategy on how to address the country's increasing economic policy issues".

Patience with the markets is running thin in Iceland. The Financial Supervisory Agency launched an investigation last week into possible market manipulation by hedge funds. The governor of Iceland's central bank has also said that the country has been the victim of a speculative attack.

Both institutions believe that speculators may have abused the credit default swap market for Iceland's banks, deliberately spreading false rumours to create fears of a banking crisis in order to profit from short positions on the krona and the stock market.

A direct intervention by the Icelandic authorities, if it goes ahead, would mirror a similar move taken by the Hong Kong Monetary Authority after its currency was attacked in 1998 amid the Asian economic crisis. Other countries, including the UK, have been less successful in defending their currencies.

Iceland's moves are expected to be taken in tandem with an announcement that its central bank has agreed to work with other Nordic central banks to provide additional liquidity to the financial system, if needed.

Iceland's rapid economic growth in recent years has created imbalances such as a current account deficit of 16 per cent of GDP in 2007 and annual inflation of 8.7 per cent in March - well above the central bank's target of 2.5 per cent.

These factors, alongside aggressive borrowing by its three main banks, has undermined investor confidence, forcing the central bank to impose an emergency interest rate rise of 1.25 percentage points to a record 15 per cent last week.

In spite of rising interest rates, the krona has lost about a quarter of its value against the euro this year as rumours of a potential financial crisis and a banking collapse have swirled around the markets.

The government and credible international economists have made clear that Iceland's finances are sound, its pension system fully funded, its current account deficit sharply reduced and its banks well capitalised by international standards.

chris1

Icesave was featured on Working Lunch again today - this time they stated that only 90% of the first ~£15K (the part covered by the Icelandic compensation scheme) i.e. NOT 100% - was covered. Does anyone know if this is correct?