Former PM of Iceland Blames Banks for Collapse Skip to content

Former PM of Iceland Blames Banks for Collapse

By Iceland Review

Former Prime Minister Geir H. Haarde, who is accused of negligence in the Special Investigative Commission’s crisis report which was made public yesterday, said he is pleased that the report has finally been published. But he stated that his government cannot be blamed for the banking collapse of October 2008—the banks themselves are at fault.

Geir H. Haarde. Copyright: Icelandic Photo Agency.

Haarde said he does not agree with the committee that he demonstrated negligence in his time as prime minister, Morgunbladid reports.

He reasoned that in 2008 his government had tried to save the banking system. “But what people didn’t know until later is that it was impossible and therefore, unfortunately, we failed.”

The former PM pointed out that the report states that the last chance to save the banking system was in 2006.

“People just didn’t realize how shaky the foundations were on which the banks were standing and what kind of operations were taking place there, something which is now increasingly coming to light,” Haarde added.

“The banking collapse was not the fault of the Icelandic government although some faults can be found concerning formalities within the government and the ministries,” Haarde iterated.

“The banking collapse was caused by the banks themselves,” Haarde claimed. “They were irresponsible, they went ahead when the EU’s regulations on an open financial market were introduced here and took advantage of, like other banks, the low interest rates at the financial markets.”

“Of course no one suspected that the money which the banks earned went to such irresponsible loans as seems to have been the case,” Haarde concluded.

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