Iceland’s Financial Authority Takes Over Kaupthing Skip to content

Iceland’s Financial Authority Takes Over Kaupthing

By Iceland Review

Representatives of Iceland’s largest bank Kaupthing decided late last night to hand control of the bank over to the Icelandic Financial Supervisory Authority (FME). A committee on its behalf will take over Kaupthing’s board today.

According to Morgunbladid, Kaupthing’s representatives believe that the response of British authorities regarding the Icesave accounts of Landsbanki Bank and discussions in society that Icelandic authorities would not secure the deposits in these accounts were the deciding factor in Kaupthing’s fate.

Because of this response the British Financial Supervisory Authority took harsh measures against Kaupthing’s operations in the UK yesterday morning and shortly afterwards they had taken over and closed the bank’s daughter company in the UK, Kaupthing Singer & Friedlander.

“We were not in arrears, we had plenty liquid assets and a firm asset position. But the company was taken away from us with force in Britain and there was nothing we could do about it,” said a Kaupthing representative who wished to remain anonymous.

Kaupthing’s representatives said they believe that when British Chancellor of the Exchequer Alistair Darling announced yesterday morning that Iceland did not intend to secure the deposits of British account holders and that British authorities would therefore take legal actions against Iceland, he had been referring an interview with Davíd Oddsson, chairman of the Central Bank board of directors, on RÚV’s news magazine Kastljós on Tuesday night.

Oddsson said in the interview that Iceland would not cover the foreign debts of the banks, and according to Kaupthing, that is why Darling concluded that the Icesave deposits would not be secured by Icelandic authorities.

As soon as Darling said that Iceland was not going to pay, the faith of foreign loan granters in Icelandic banks simply evaporated, Kaupthing claims.

Click here to read about the Financial Authority taking over Iceland’s other two largest banks.

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