Central Bank of Iceland Loses on Collateral Loans Skip to content

Central Bank of Iceland Loses on Collateral Loans

The Icelandic state treasury is suffering an extensive loss because of collateral loans granted by the Central Bank of Iceland to the old commercial banks that have now been nationalized, Glitnir, Landsbanki and Kaupthing.

The loss is expected to amount to ISK tens or hundreds of billions (ISK 100 billion = USD 820 million, EUR 570 million), Morgubladid reports.

The collateral loans were granted through smaller banks and financial companies.

Sparisjódabankinn (formerly known as Icebank) owes approximately ISK 150 billion, Straumur ISK 40 billion and Saga Capital, Askar Capital, SPRON and VBS a combined sum of ISK 45 billion.

It is unclear how these debts will be settled.

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