Iceland: “This Was No Ordinary Crash”
September 21st, 2009“The smallest central bank in the world is central to a financial scandal that threatens to engulf much of the West. What secrets must the larger banks hold?”
— The Daily Bell: Iceland: What Ugly Secrets Are Waiting to Be Exposed in the Meltdown?
From August.
Via: Telegraph:
Almost a year since the collapse of the Icelandic banks, the rotten nature of these financial corpses is slowly beginning to emerge.
For months rumours of share-ramping, market manipulation, excessive loans to their owners and unusual transfers off-shore have been circling Kaupthing, Glitnir and Landsbanki, whose failure last October left 300,000 British customers unable to access their money.
It has now become clear that this was no ordinary crash. Iceland’s special investigation into “suspicions of criminal activity” at the three banks is likely to stretch from Reykjavik to London, Luxembourg and the British Virgin Islands.
Eva Joly, the French-Norwegian MEP and fraud expert hired by Iceland and now working with the Serious Fraud Office, now believes it will be “the largest investigation in history of an economic and banking bank collapse”.
Many of the banks’ secrets are likely to be inextricably bound up with corporate Britain and the success of these investigations in tracing and recovering assets is likely to affect every UK household.
Local authorities lost £1bn – or 5pc of all the money from council tax – in the over-leveraged institutions, leaving many facing the prospect of drastic cuts in services or steep hikes next year as they wait for the proceeds of the banks’ administration to dribble through.
Although the Treasury can barely afford the UK’s own bailout, it was forced to pay out £7.5bn to British savers who had internet accounts with Landsbanki’s Icesave and Kaupthing’s Edge with the uncertain prospect of getting the money back.
It now looks like Icelandic MPs will agree to pay £2.3bn to the Treasury to reimburse British savers up to the value of 20,887 euros (£18,054).
Not only did local authorities, charities and savers have billions tied up in its bank accounts, but a number of the City’s wealthiest investors, from Robert Tchenguiz and the Candy Brothers to Kevin Stanford and Simon Halabi received hefty corporate loans from these insititutions.
But among the worst affected were 2,000 savers with £117m in Landsbanki in Guernsey. They lost their entire savings with no compensation. Many are still waiting in line with a queue of commercial creditors.
Research Credit: Pookie
