Minister of Finance Likens SpKef to Icesave Skip to content

Minister of Finance Likens SpKef to Icesave

oddnyghardardottir_althingiMinister of Finance Oddný Harðardóttir posed the question at the Icelandic parliament, Alþingi, yesterday, as to whether the problems the state currently faces because of the savings bank SpKef isn’t “our domestic Icesave.”

The minister referred to the debt load the Icelandic state was subjected to when Landsbanki collapsed and depositors in its overseas branch Icesave had to be compensated.

The affairs of the savings bank were prominent during parliamentary discussions yesterday with five MPs asking Oddný and her predecessor, Steingrímur J. Sigfússon, about them, Fréttablaðið reports.

Chairman of the opposition’s Independence Party, Bjarni Benediktsson, asked whether it might have been the wrong decision to found SpKef on the basis of the defunct savings bank Sparisjóður Keflavíkur.

“What happened to the assets? Was the portfolio of assets overvalued to such a great extent? Was it possibly a mistake to found a new savings bank? Did people have unrealistic expectations on the continued operations of a savings bank in this area? Was it an unwise arrangement to have the savings bank continue operations on an exemption for a period of time? Did a burning of assets occur in the meantime?” Bjarni asked.

Oddný said it is clear that contribution of ISK 19 billion (USD 146 million, EUR 117 million) by the state had to been made to guarantee deposits, adding that the bank’s portfolio of assets proved to be in much worse condition than originally expected.

The minister is anticipating a report on the savings banks next autumn which she hopes will shed light onto the reasons as to why Sparisjóður Keflavíkur failed to such an extent.

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