It is all a bit strange.
Landbanki was on a blacklist that bankers in the Netherlands and Britain use. Landbanki and icesave was allowed on the Dutch and English market while it should not have been. As it turns out, it is a stupid EU rule that EU members cannot refuse foreign banks from entering local markets.
What EU members can do is set very strict rules but in this case these rules where not followed. DNB (De Nederlandse Bank) had meetings with landbanki, but landbanki refused to co-operate with the DNB. And the DNB did not act more forcefully as they should have.
What happened is that in may 2008, a lot of people transferred
their savings(money) to the accounts of icesave. 1,6 billion euro from the Dutch savers and 4.5 billion pounds from the UK savers.
In October 2008, people in Holland (and Great Britain i assume, i only have the short background version of the Netherlands) where told that icesave was not able to perform financial services because of liquidity problems of parent company landbanki. Iceland nationalizes landbanki as solution to take over the debt. The icesave website is no longer reachable and there is a lot of uncertainty for Dutch and British people who where now thinking they lost there savings.
In November 2008 IMF and some EU countries provide a loan to Iceland to cover the debt and the savings that has to be payed back. The Netherlands and Iceland reach in June 2009 an agreement where Iceland get the chance to pay the (remaining ?)1.3 billion euro back over a period of 15 years. Then in July 2009 Iceland want to become a EU member which The Netherlands and the UK are not all to happy about.
In august 2009 the agreement is again discussed between Iceland, the Netherlands and Great Britain. But Iceland is being unclear about certain conditions.
In December 2009 Iceland votes for a new law(probably tax or something) to pay back the debt to the Netherlands and Great Britain. 31 December President Olafur Ragnar Grimsson refuses to sign the law. In January 2010 a quarter of the Icelandic people sign a petition where they state that they refuse to pay back the money. Olafur Ragnar Grimsson refuses to sign the law and new meetings between Iceland and the Netherlands and Great Britain are held for a new agreement. In November 2010 Iceland has agreed to pay back the money (but as expected over a large period of time).
Deena Stryker has a point. Iceland had a lot of debt. And that is why icesave and landbanki where on a blacklist that banks maintain in Europe. The DNB (De Nederlandse Bank)has to check foreign providers of financial services but could not prevent landbanki because of stupid EU rules about the free market. The DNB did act, but not strong enough.
The real perpetrators are not the citizens of Iceland people. But the people in Iceland who caused the financial troubles by liberating and privatizing everything without thinking of the consequences. The landbanki people and more of those financial idiots.
From the article (OP)
Five years of a pure neo-liberal regime had made Iceland, (population 320 thousand, no army), one of the richest countries in the world. In 2003 all the country’s banks were privatized, and in an effort to attract foreign investors, they offered on-line banking whose minimal costs allowed them to offer relatively high rates of return. The accounts, called IceSave, attracted many English and Dutch small investors. But as investments grew, so did the banks’ foreign debt. In 2003 Iceland’s debt was equal to 200 times its GNP, but in 2007, it was 900 percent. The 2008 world financial crisis was the coup de grace. The three main Icelandic banks, Landbanki, Kapthing and Glitnir, went belly up and were nationalized, while the Kroner lost 85% of its value with respect to the Euro. At the end of the year Iceland declared bankruptcy.
Facebook
Twitter