According to a report on Bloomberg.com Iceland’s parliament may block any government attempt to recapitalize the island’s banks after a court ruling threatened to leave some lenders insolvent.
Bloomberg continues: “Thirty-four lawmakers in the 63-seat Reykjavik-based assembly plan to vote against a government proposal to rescue lenders, according to three opposition party heads and three members of the coalition. The government, which can’t bail out the banks for a second time in as many years without parliamentary backing, may need to support the industry after a June 16 court ruling made them liable for currency losses on as much as $28 billion in loans.”
Three MPs of the majority Left Green party said they would not support such a measure: Gudfridur Lilja Grétarsdóttir, Lilja Mósesdóttir and Ögmundur Jónasson.
In addition the leaders of the opposition parties said they would be against the government pouring more money into the banks. Bjarni Benediktsson, Chairman of the Independence Party said “the government should try to avoid” recapitalizing the banks “at all cost.”
See also:
30.07.2010
Moody’s Changes Iceland’s Credit Rating to Negative
26.07.2010
Reykjavík Court Rules on Foreign Exchange Loans
09.07.2010
Althingi Ombudsman Demands Answers on Loans
08.07.2010
Minister: Guidelines on Interest Rate of Loans Ill-Judged
05.07.2010
Protest at Central Bank of Iceland, One Arrested
01.07.2010
Fifty Billion Added to Consumers’ Burden
19.06.2010
Price Indexation: Government Won’t Intervene
18.06.2010
Uncertainty Regarding Liquidated Car Loans
17.06.2010
Most Significant Economic News in Iceland since the Crash. Currency Pegged Loans Illegal says Supreme Court
