Sunday, January 18, 2009

Brown Made the Icelandic Bank Crisis Worse

A reader has sent me an article from the Wall Street Journal a couple of months ago by Hannes Gissurarson, a board member of Iceland's central bank, which raises serious questions about Gordon Brown's conduct regarding Icelandic banks. If it was covered at the time, apologies, but it's new to me, so I thought it worth posting here. Here's the relevant extract...

As recently as last year, Iceland was considered an economic success story. After 16 years of free-market reforms, it was one of the world's 10 richest and freest countries. In the first week of October 2008, it all went wrong. The three main Icelandic banks collapsed and the government took over their domestic branches. It is still unclear what will happen to their foreign operations. The local currency, the krona, went into free fall. Foreign trade came to a standstill, as it became almost impossible to transfer money to and from the country.

At the beginning of the financial crisis in 2007, the Icelandic banks were quite solvent. They had almost no subprime loans. But there was a foreseeable liquidity problem. When the Icelandic Central Bank tried to obtain credit lines from other central banks in the EEA, it was refused almost everywhere. Suddenly, it did matter where the banks had their headquarters. Once the financial markets realized that there was no credible lender of last resort in the Icelandic financial system, a run on the banks became almost inevitable.

One or two of the Icelandic banks might have survived, though, if on Oct. 8 British Prime Minister Gordon Brown had not used the country's antiterrorist law to take over the assets and operations of two Icelandic banks in the U.K., Kaupthing and Landsbanki. The Icelandic Ministry of Finance and Central Bank even found themselves briefly on the list of terrorist organizations published on the Web site of the British Treasury, alongside al Qaeda and the Taliban.

These British measures significantly worsened Iceland's financial crisis. The island's banking system and foreign trade collapsed. Unsurprisingly, banks are reluctant to transfer money to and from "terrorists."

Mr. Brown justified his draconian actions by saying that the Icelandic government was unwilling to honour its legal obligations to British depositors of Icelandic banks. There is no evidence for this charge. To the contrary, the Icelandic government repeatedly asserted that all legal obligations to depositors in the EEA area would be honored. These obligations are covered by the Icelandic Depositors' and Investors' Guarantee Fund set up under EEA rules. The fund is an independent body, guaranteeing all deposits up to about €20,000. However, if the fund is unable to fully meet its obligations, then there is no requirement, under EEA rules, for the Icelandic government to step in.

Prime Minister Brown also talked darkly of last-minute bank transfers from England to Iceland. Whether that is true or false remains to be seen. But
interestingly, the last-minute transfer of $8 billion from Lehman Brothers in England to America in September did not land the U.S. Treasury or the Federal Reserve on the British list of terrorist organizations.

Having helped to bring down two of the three Icelandic banks, Mr. Brown, using the position of London as a financial center and his country's influence in the IMF and the European Union, demanded that the Icelandic government go far beyond what the Depositors' and Investors' Guarantee Fund is obliged to do under EEA rules. The prime minister, fearing that the fund does not have sufficient means, insisted that the Icelandic government must guarantee foreign deposits in Icelandic banks. Late Sunday, Reykjavik succumbed to this pressure and agreed to reimburse European savers for up to about €20,000. This might put a debt of perhaps $10 billion on the shoulders of 310,000 people, close to 100% of the country's GDP.

The central banks in the EEA that refused to come to the assistance of the Icelandic Central Bank probably did not anticipate the damage their inaction would cause even beyond Iceland's shores. And Prime Minister Brown probably did not understand that bringing down the Icelandic banks would inflict much higher costs on British depositors than if he had stayed calm and participated in resolving the situation.

Little wonder that Icelanders these days feel rather abandoned by their European friends.
I wonder why we have heard little in the British press about Brown's conduct over this. Clearly the author is a stakeholder and may have a biased view, but he raises some very serious questions, not least why Iceland was treated very differently to the USA.

43 comments:

Unknown said...

For a long time many people, Including myself, were concerned as to how such a small country came to wield huge financial clout throughout the UK and Europe. I'd hazard a guess that the whole thing was a bit of a 'house of cards' which had to fall at some stage.

As to the £8 billion transferred from Lehmans, its been well documented that they operated a system whereby global offshoots cleared all their liquid funds to the US every night, for the US arm to issue the required capital out the next day.

As to whether the Icelandic banks worked the same system remains to be seen. However I think we should take the article with a healthy pinch of salt...

Alex said...

Well said stephenni1971. Brown's behaviour may be reprehensible, but it is ridiculous that a country with a population the size of Bradford, and few assets apart from dwindling Cod supplies, should support a banking system on the scale of the Icelandic banks.

David Boothroyd said...

Indeed. It was well known what the Icelandic banks were doing, and how vulnerable their financial strategy was if economic conditions turned bad (and also how the three Icelandic banks were effectively interdependent, so if one fell they all went).

About the use of 'terror powers' (which were nothing of the sort) I suppose we should now call our laws things like 'Fluffy Kittens Act 2009' to stop offending people when they are used.

kinglear said...

I can't agree with the comments about the Icelandic Banks being a house of cards & and an accident waiting to happen. Every bank is - see what has happened here where 80% of our loans now transpire to have been to overseas entities (probably about the same for Iceland)
I can't think why the anti-terror laws were used ( they didn't need to be for eg BCCI)and I can't think that Brown's assertion of money being transferred back to Iceland holds any water.That would imply the UK branches of these Banks had a shortfall. In fact the opposite is true with everyone paid back in full ( pace the Channel Islands)or their savings accounts transferred (in full) to other institutions.
So my view is that Brown et al. panicked ( perhaps understandibly) and felt they had to "do something". Unfortunately, as so often before, his inaction is rather better than his action.

Andrew said...

What a shock! David Boothroyd once again blindly defends Labour and totally fails to answer the question.

The question David is: Did Brown Make the Icelandic Bank Crisis Worse with his blundering, tough man action?

As for terrorist legislation can you therefore explain why Icelandic institutions did appaer on a list alongside Al Qaeda?

Alex and stephenni1971 - Do you have the same view of Luxembourg which also has a large banking sector?

(PS stephenni1971. I'd get a new handle unless this is actually you!!!)

Anyway, this bit interests me:

"Mr. Brown justified his draconian actions by saying that the Icelandic government was unwilling to honour its legal obligations to British depositors of Icelandic banks. There is no evidence for this charge. To the contrary, the Icelandic government repeatedly asserted that all legal obligations to depositors in the EEA area would be honored."

Did Brown tell a porkie?

Chris Paul said...

"May have a biased view"? Talk about understatement ... and dare I add, you do too Iain. Brown's main responsibility is to UK citizens not to Icelandic journalists or Kent bloggers. He seems to have acted in good faith and for the benefit of the UK. So where's the beef?

Andrew said...

Chris Paul said..."..."May have a biased view"? Talk about understatement ... and dare I add, you do too Iain. Brown's main responsibility is to UK citizens not to Icelandic journalists or Kent bloggers. He seems to have acted in good faith and for the benefit of the UK."

Please explain Paul why making the situation worse in Iceland and causing a run on other banks benefits the UK?

I think the councils and charities who have money tied up within them may have something to say about that.

"So where's the beef?"

How about the posibility of the Prime Minister lying?

"Mr. Brown justified his draconian actions by saying that the Icelandic government was unwilling to honour its legal obligations to British depositors of Icelandic banks. There is no evidence for this charge."

And how about him failing to meet the boasts he makes about the crisis needing international co-operation.

His actions in Iceland don't really meet the high standards he apparently sets.

Anonymous said...

You're on to something Iain.

Why else would David Boothroyd and Chris Paul be in so quickly to respond on behalf of Labour?

Keep it up. This could be the issue that finally exposes Brown for what he is.

A bungling, lying bully.

Colin said...

I think brown's actions in relation to the Icelandic banks has more to do with Cameron's "headless chickens" jibe than anything else.

It is becoming clear that many, if not all of the government's attempts at trying to deal with the financial crisis have been ill thought out, panic driven and ultimately useless or worse.

brown's disgraceful behaviour in this instance looks like nothing more than a cynical ploy to try to convince us that he was doing the right thing for hard working families.

Shouting Into The Void said...

"why Iceland was treated very differently to the USA."
Well because we could get away with it. Iceland have very little international influence. If we had done the same to America all hell would have broken loose.

David Boothroyd
How you can claim that the powers the British Government used were not anti-terrorism is beyond me. The legislation used was part of the "Anti-terrorism, Crime and Security Act 2001". The legislation used fits in the bill between "Forfeiture of terrorist cash" and "Immigration and Asylum - Suspected international terrorists". The legislation used was created in the aftermath of September 11th. It's pretty clear that at the time freezing assets of foreign banks was not intended.

Chris Paul
"He seems to have acted in good faith and for the benefit of the UK. So where's the beef?"
The beef is that he waded in gun-ho and made the situation much worse. If anyone should be labelled a terrorist it must surely be him. Demanding that the government guarantee foreign deposits when it did not legally have to do so and then crippling a foreign countries economy when they did not comply with his demands.

jask said...

It was the last-minute transfer of $8 billion from Lehman Brothers in England to America in September that woke up the Gov to the problem, that is why they stepped in for the Iceland bank issue. I thought this had been widely acknowledged now. I have to say that the obligations that Iceland banks (and by default, the Iceland Gov) took on were out of proportion to their ability to fix it if things went wrong - as they did. It is not the UK's job to fix Iceland's banking system, the UK Gov must look to safeguard its own citizens else what is the point of it?

Lorenzo said...

Brown's not in control of his jaw, his face, his nails, his deficient brain rattling around his cranium and incapable of ever making a decision that benefits the greater part of the UK population. He continues to stumble from one disaster of his own making to the next. His leadership qualities are zero and a great mind leading a country out of his own disaster he will never make as the potential was never there in the first place. He has just cheated and bullied his way to where he is, the laughing stock of the world. A tin pot dictator.

Bryan Dunleavy said...

Brown has always been very good at bullying and I guess a small, largely insignificant country offered an irresistible target.
Of course the consequences were not thought through. Quite apart from undermining the proper effectiveness of anti-terrorist legislation, many estimable charities have been stymied by Brown's action. I could cite one of my local charities - Naomi House - which provides hospice care for terminally sick children, now in severe difficulties because Brown has seen to it that their Icelandic investment is frozen.
I can't even bring myself to say what I think of this state of affairs.

Mr Mr said...

"even found themselves briefly on the list of terrorist organizations published on the Web site of the British Treasury, alongside al Qaeda and the Taliban."

Briefly? There are no less than 8 listings on the sanctions in 2008
2008 sanctions

The reasons given are:
"The Treasury make the Order because they believe that action to the detriment of the UK’s economy (or part of it) has been or is likely to be taken by certain persons who are the government of or resident of a country or territory outside the UK."
The Landsbanki Freezing Order 2008

For current regimes they appear at the bottom of a list of bad regimes with a rider to say they ain't terrorists or a rogue state.
Current regimes

Mr Mr said...

Forgot to add above that this was all done under

"9. The Treasury makes this Order under the powers conferred by sections 4 and 14 of and Schedule 3 to the Anti-terrorism, Crime and Security Act 2001."

The Landsbanki Freezing Order 2008

Anonymous said...

jask said..."It is not the UK's job to fix Iceland's banking system"

No, but it doesn't say much for Brown's boast that the British were leading the way on this crisis via "international co-operation".

jask said..."the UK Gov must look to safeguard its own citizens else what is the point of it?"

Safeguarding? It's actions have caused this:

Lost in Iceland: £1 billion from councils, charities and police

Are you really saying Brown didn't make the Iceland situation worse and put at risk those investments?

Mr Mr said..."For current regimes they appear at the bottom of a list of bad regimes with a rider to say they ain't terrorists or a rogue state."

For a time they "briefly" weren't. They were just placed in amonngst the big boys of terror.

Mr Mr said..."The reasons given are:

"The Treasury make the Order because they believe that action to the detriment of the UK’s economy (or part of it) has been or is likely to be taken by certain persons who are the government of or resident of a country or territory outside the UK."

Oh this is going to be good.

Have any hacks questioned the treasury to come up with the evidence to back up this claim?

jask said...

Marcus, I'm not defending it, and I'm certainly not defending Brown. But I am saying that people had to make a quick decision based on the info they had at the time, they couldn't afford to wait it out else billions might have disappeared from the UK in hours. To me, the decision seems reasonable in light of what they knew at the time and the Lehman action. Hindsight is a wonderful thing, but doesn't butter any parsnips.

Anonymous said...

jask said..."To me, the decision seems reasonable in light of what they knew at the time"

But what did they know at the time for it to be "reasonable"? What contacts did the UK Government make with Iceland to avoid any such possibility?

It's Iceland not al Qaeda.

And Tony Travers of the LSE said this on the 10th of October to Australian TV.

"The Landesbank which is the one that appears to be, that councils are the most exposed to is one that had a very good credit rating at the end of last week, as good as banks trading in Britain today."

http://goldismoney.info/forums/showthread.php?t=311081

Australian TV? Why aren't the UK media casting light on this?

Unsworth said...

@ Chris Paul

"Kent blogger"

Anything wrong with residing in Kent - and blogging? Are you exhibiting some sort of personal regional bias? Yes, probably.

And "Brown's main responsibility" has eluded him for well over a decade - and still does.


@ David Boothroyd.

"Well known" presumably by the Financial Authorities whose job it is to oversee and advise - and who clearly failed. Did Brown have anything to do with setting them up by any chance? His actions were diversionary and also diplomatically inept. Just what did they achieve?

As to the 'Fluffy Kittens Act 2009' , presumably you're drawing on your intimate private contacts and have already had sight of the draft legislation which this inane bunch of shysters will lay before Parliament. I certainly would not put it past them - having seen the extent of the stupidity of legislation since they came into office.

Doubting Richard said...

Chris Paul

"He seems to have acted in good faith and for the benefit of the UK"

No. He seems to have acted in bad faith. That is the correct way to describe lying and using legislation you helped draft for purposes never intended by Parliament.

He seems to have been trying to appear to act for the benefit of the UK, to help his own dire electoral prospects. In fact the UK will not, in the long term, benefit and was never likely to. As usual Gordon Brown acted for the benefit of Gordon Brown.

jask said...

Marcus, they knew that billions might disappear in hours, that is what happened at Lehmans when the trading funds were transferred over the weekend. That legislation is a red herring, it was not all about "terrorism". It was a UK Gov instrument and they used it to the benefit of UK citizens (as I guess they perceived it to be at the time). Whether they were right or wrong in hidsight is a matter for those with the luxury of time, I'm not a Labour fan but in this case I think it was right they took action. Goodness knows they would have got it in the neck if they sat around doing nothing whilst billions of pounds of savings went offshore.

Man in a Shed said...

Everyone makes a common underlying assumption; that Brown is trying to resolve this crisis rather than deepen it. The disagreement seems to be over if he's doing the right thing.

Maybe, just maybe, he's trying to bring about the crisis that those on the hard left dream about. This possibility deserves more attention than its getting.

Can anyone rule out a declaration of emergency in the next year and the suspension of democracy ? After all its not as if Brown is a fan of elections where there are any opponents.

Think before you say no - and think about how likely the nationalisation of many of the banks seemed just a short while ago.

PS On Iceland it shoudl also be pointed out that the UK Govt has loaned money to Iceland - mostly after the Icelandic's started thinking about Russian cash.

Rexel No 56 said...

It's obvious.

Brown sought to undermine Iceland in order to damage the SNP in the run up to the bye-election (can't remember the constituency, but next door to Brown's).

The notion of the arc of independent, celtic and prosperous nations had to be wrecked in order to frighten the Scots back into the Labour fold.

It worked.

R56

DespairingLiberal said...

I think probably the Treasury panicked, having seen what was going on in the US and misunderestimating the impact it would have on UK institutions. Blaming it on Brown is technically accurate as the buck stops with him, but I am quite sure this plan was hatched in HM Treasury.

I do agree with Iain and the writer of that article that Brown was underhand, confused and panicky. He has subsequently repeatedly lied about the whole thing.

The dismay we all felt that anti-terrorist legislation had been invoked (and proudly publicised as such!) merely added to the nausea surrounding this incident. Can HMG really not get it's collective act together better than to have to reach for such instruments. If they do this in what was a relatively minor crisis, what in the sam hell are they going to do in a major one??

Chilling ineptitude, blatant disregard for the norms of law and process, complete indifference by the chief law officers... the list goes on and on.

Clearly the Brown cabal are utterly unfit for the offices they currently hold, but worse, Britain is visibly at a low ebb of mismanagement and public stupidity.

No wonder international investors are fleeing our currency and investments.

Van Helsing said...

Good point man in a shed. They really do not want the opposition in a position to see what they've been hiding and the closer they get to an election where they are going to lose, the more they will try to avoid it. I think they want trouble on the streets, so they can call on the Civil Contingencies Act.
If your not sure, look at all the paper shredding that occurred when Boris won the mayoral elections.

Colin said...

Man In a Shed...

I'm not sure I go along with everything you write, but, I do believe that there could be some nasty skeletons lurking in the new labour cupboard. As a result, the last thing they want is regime change.

Unknown said...

"At the beginning of the financial crisis in 2007, the Icelandic banks were quite solvent"

No they weren't. They were quite liquid. Completely different thing.

Norman C said...

Rexel No 56 said...

"Brown sought to undermine Iceland in order to damage the SNP in the run up to the bye-election (can't remember the constituency, but next door to Brown's)...to frighten the Scots back into the Labour fold."

Interesting 'theory'.

Particularly when set alongside the leaks to Robert Peston over the bail out of RBS - Salmond's old bank.

I believe the 1966 North Hull by-election used to be known as the most expensive by-election ever when a new Humber Bridge was announced just before the vote.

If what you're saying takes hold that would make Glenrothes by far and away the most expensive.

How much was it Brown had to spend/borrow to make him look a superman?

£500 billion wasn't it.

Jess The Dog said...

Did Iceland seriously end up on a list of "terrorist organisations"? I should have sent them a few quid.....

Norman C said...

Doesn't appear to be working now.

ComRes Scottish sub-sample -

SNP 36%
Labour 35%
Conservatives 13%
Liberal Democrats 7%

Unsworth said...

@ DespairingLiberal

"Blaming it on Brown is technically accurate as the buck stops with him, but I am quite sure this plan was hatched in HM Treasury"

And you seriously believe that those in HM Treasury do anything - including breathing - without Brown's direct and personal involvement? Let's not be too silly, eh?

As to foreign investors fleeing - yes, and a very substantial increase over the past year.

Rich Tee said...

I am really starting to think along the same lines as Man in a Shed.

Financial crisis or power cuts, this administration is dying for an excuse to impose a "temporary" state of emergency.

Man in a Shed said...

The difficulty with the current situation is it is far outside everyone's experience.

We should keep an open mind about what is going on, and consider a full range of possibilities (including high consequence possibilities that we would normally think of as highly improbable ) until there is enough evidence to rule them out.

Only Brown knows what he was up to with Iceland. But what he has achieved is the bad will of a key NATO Allie, which risked driving it into the hands of the Kremlin. The UK's relations with Iceland will be poisoned for another generation.

Andrew Cooper said...

'The difficulty with the current situation is it is far outside everyone's experience.'

Quite.

Am I the only commenter here who feels that Punch and Judy politics isn't up to dealing with the complexity of our current mess?

It's great fun to attack Big Swinging Dick Brown's every move, but does anyone really believe that Cameron/Osborne would be any better?

I think our host - and anyone else who blindly follows the left or right - is simply interested in winning, regardless of its consequences for the country.

IMO, the old political divisions are completely dead. Punch and Judy can't get us out of this mess. Sadly, we're stuffed: Punch and Judy is all we've got.

Lola said...

Iceland is our neighbour. Even at the time, even given all that might have been wrong with Iceland and its banks, we should have treated them as neighbours. This is not the same thing as letting neighbours off the hook for bad behaviour, but working with them to solve the problem.

By all accounts Brown is a vindictive man, so behaviour that took no account of neighbourliness was to be exepcted.

Alan Hood said...

Brown's actions also caused the failing of the Kaupthing Bank in the Isle of Man. This was a seperate entity from the UK bank and was very solvent. However it had some £550 million deposited with the UK Kaupthing and after the UK government action could no longer continue to meet its obligations. Consequently many depositors who are often British citizens who live abroad lost or may lose their money.

Brown and Darling have been hinting that people who deposit money in offshore accounts are just trying to get out of paying tax. This is not the case for most expatriates because unless you have a UK address you cannot open a UK based account and so have no choice but to use an offshore centre.

Alan Hood said...

Brown's actions also caused the failing of the Kaupthing Bank in the Isle of Man. This was a seperate entity from the UK bank and was very solvent. However it had some £550 million deposited with the UK Kaupthing and after the UK government action could no longer continue to meet its obligations. Consequently many depositors who are often British citizens who live abroad lost or may lose their money.

Brown and Darling have been hinting that people who deposit money in offshore accounts are just trying to get out of paying tax. This is not the case for most expatriates because unless you have a UK address you cannot open a UK based account and so have no choice but to use an offshore centre.

Unknown said...

Many people have commented that Brown acted to protect British citizens. He didn't protect me. I chose to save with the Derbyshire BS, but was forced to open an account in the Isle of Man branch because I am resident abroad and they wouldn't let me open one in the UK, despite the fact that I can comply with all the money laundering regulations to prove my identity etc. Anyway, my deposit was sold to Kaupthing by the Derbyshire in December 2007. I had no say in the matter, the Derbyshire didn't even tell me that Kaupthing was Icelandic (it was described as a "northern European bank". This sale was allowed by the regulators in the UK and the Isle of Man, and depositors were assured that ther money was 100% safe. At the recent Treasury Committee Meeting, a government representative stated that "the sale of Derbyshire deposits to Kaupthing did not, in theory, disadvantage Derbyshire depositors". But, when the sale took place, Iceland was in trouble and the regulators were well aware of it. I have now lost my savings, and all we are getting are lies and cover ups from the authorities. Brown didn't protect me, he did the opposite. If he would allow the £550million of deposits that belong to Kaupthing Isle of Man but were sent to the UK for "safekeeping" to be returned, Kaupthing IOM would be back in business again.

Littlevoice said...

Rosslyn's absolutely right.

If the UK government's intention of freezing these Kaupthing IOM funds was to prevent them disappearing off to Iceland, then why not now release the £550m back to Kaupthing IOM? That money belongs to the depositors, not Iceland. It includes our savings, we are one of Brown's "hard working British families", we remain British, we are still voters and we have never dodged paying our fair share of tax. Why are they stealing our savings?

I Luv Animals said...

Not all UK savers are 100% guaranteed. We are another of the Derbyshire building society savers who have lost all our savings, due to the Derbyshire selling out to the KSF bank without notifying us. We had our own business, worked hard 7 days a week all hours, employing others, paid all taxes etc, put the proceeds from the sale in the Derbyshire Building Society IOM as it had an Explicit British 100% parental Guarantee. Just as a point of interest while monies are in the Isle of Man, tax is stopped at source and paid to the UK, and also declaired on year end tax return. Knowing that we would need it to pay the capital gains tax now 2009. The Derbyshire took our money but forgot to mention that they were selling the business, they did not give us the one months notice as required by their terms and conditions, neither did they give us the oppertunity to remove our monies. They gave our deposit to the Kaupthing Singer and Friedlander bank without our knowledge. 2 months after the takeover we received a letter from KSF bank to inform us that they now had our account but not to worry as the same terms and conditions remained as they were when with the Derbyshire, still 100% guaranteed. There was no mention that it was an Icelandic bank, neither was there any offer to remove our monies. The Derbyshire sold us out without informing us and should be held responsible. The executives of the Derbyshire received bonuses in the region of one million pounds in December for the merger with the Nationwide, and they haven't even had to work for that. Incompetence should not be rewarded. We did not choose to save with the KSF bank it was forced upon us. We have worked hard and saved for our retirement so we would not be a burden on the government, why should savers be penalised? We do not want charity, just our money back so we can pay our way. So will someone please release our monies and send them back to their rightful owners?

Unknown said...

I am one such depositor, and the more I learn about what happened, the more I'm convinced that this is a Government scandal shrouded in secrecy and intended to alienate and discredit offshore jurisdictions as viable and legitimate banking centres.

If the UK Government knew about Icelandic banking problems back in March, why didn't they tell anyone ? They even left their own UK councils in the lurch, and they had millions invested.

Why did the UK Government refuse to assist Iceland ? It would have cost a fraction of what the they have spent in transferring ownership of Kaupthing (UK) to Dutch owned ING bank. Several billion of taxpayers money was needlessly spent in that exercise.

Kaupthing was a viable business prior to the UK Government using anti-terrorism laws to seize their assets early in October. The Government brought the bank down and necessitated the rescue of the UK arm.
Isn't it interesting how the FSA advised Kaupthing (IoM) to transfer £557 million to Kaupthing (UK), then denied that there was any guarantee that the money would be safe. Imminently after the transfer, the UK Government froze the assets of Kaupthing(UK). I'm convinced that this was pre-meditated

The UK Government are preventing the funds that were transferred from Kaupthing(IoM) from being returned back to the bank. This money belongs to Kaupthing(IoM) and NOT Kaupthing(UK). It should be used to help re-launch Kaupthing(IoM), but the UK Government is preventing this, or any other positive outcome from occurring.
This whole affair is shrouded in secrecy - there are sealed papers that the UK Government will not permit the temporary liquidators or any other interested party to gain access to. The UK Government aren't telling us the truth behind all this - they have clearly got something to hide.
The UK Government is smearing the Isle of Man as being a "Tax Haven" where people put money to evade tax. This is complete spin. It is well known that the UK Government receives large tax revenues from offshore jurisdictions owing to the EUSD tax rules that exist. These taxes have been ramping up over the last few years. The UK Government are using this as a diversion tactic to cover up their own ineptitude and dirty politics.

The UK Government have brought about the collapse of a number of Icelandic owned banks,has put over 8,000 depositors into financial hardship, has brought the Icelandic economy crashing down, and is now attempting to undermime and damage the reputation of offshore jurisdictions. That's quite a lot of dirty work that they've achieved with so little effort at a time when governments should be pulling together internationally to put an end to this global financial crisis. I think the UK Government has done this for purely selfish and corrupt reasons.

This story merits further investigation or better still a public enquiry. The UK Governments has acted in it's own self interest - it's abominable behaviour should be fully scutinised - clearly this behaviour has NOT been in the interest of the UK populus or the world economy. It has damaged relations with Iceland and offshore neighbours. The UK Government have made matters considerably worse by putting politics ahead of viable economic policy and meddling in matters that it clearly didn't understand and didn't think through properly.

Unknown said...

I am one such depositor, and the more I learn about what happened, the more I'm convinced that this is a Government scandal shrouded in secrecy and intended to alienate and discredit offshore jurisdictions as viable and legitimate banking centres.

If the UK Government knew about Icelandic banking problems back in March, why didn't they tell anyone ? They even left their own UK councils in the lurch, and they had millions invested.

Why did the UK Government refuse to assist Iceland ? It would have cost a fraction of what the they have spent in transferring ownership of Kaupthing (UK) to Dutch owned ING bank. Several billion of taxpayers money was needlessly spent in that exercise.

Kaupthing was a viable business prior to the UK Government using anti-terrorism laws to seize their assets early in October. The Government brought the bank down and necessitated the rescue of the UK arm.
Isn't it interesting how the FSA advised Kaupthing (IoM) to transfer £557 million to Kaupthing (UK), then denied that there was any guarantee that the money would be safe. Imminently after the transfer, the UK Government froze the assets of Kaupthing(UK). I'm convinced that this was pre-meditated

The UK Government are preventing the funds that were transferred from Kaupthing(IoM) from being returned back to the bank. This money belongs to Kaupthing(IoM) and NOT Kaupthing(UK). It should be used to help re-launch Kaupthing(IoM), but the UK Government is preventing this, or any other positive outcome from occurring.
This whole affair is shrouded in secrecy - there are sealed papers that the UK Government will not permit the temporary liquidators or any other interested party to gain access to. The UK Government aren't telling us the truth behind all this - they have clearly got something to hide.
The UK Government is smearing the Isle of Man as being a "Tax Haven" where people put money to evade tax. This is complete spin. It is well known that the UK Government receives large tax revenues from offshore jurisdictions owing to the EUSD tax rules that exist. These taxes have been ramping up over the last few years. The UK Government are using this as a diversion tactic to cover up their own ineptitude and dirty politics.

The UK Government have brought about the collapse of a number of Icelandic owned banks,has put over 8,000 depositors into financial hardship, has brought the Icelandic economy crashing down, and is now attempting to undermime and damage the reputation of offshore jurisdictions. That's quite a lot of dirty work that they've achieved with so little effort at a time when governments should be pulling together internationally to put an end to this global financial crisis. I think the UK Government has done this for purely selfish and corrupt reasons.

This story merits further investigation or better still a public enquiry. The UK Governments has acted in it's own self interest - it's abominable behaviour should be fully scutinised - clearly this behaviour has NOT been in the interest of the UK populus or the world economy. It has damaged relations with Iceland and offshore neighbours. The UK Government have made matters considerably worse by putting politics ahead of viable economic policy and meddling in matters that it clearly didn't understand and didn't think through properly.

bozo said...

My Husband and I were also savers with the Derbyshire BS now Kaupthing Singer and Friedlander.
So not only do we face a retirement that we had saved for with nothing we are labeled fat cat tax dodgers by our British government that has literally stolen our life savings and left us and many like us in absolute desperation.
Go to www.ksfiomdepositors.org for the real stories