MPs Admit Mistakes in Privatization of Iceland’s Banks Skip to content

MPs Admit Mistakes in Privatization of Iceland’s Banks

The need for lead investors was overestimated when the Icelandic banks were privatized, according to Independence Party MP and one of two candidates for the party’s chairman Bjarni Benediktsson, calling for stricter regulations.

Bjarni Benediktsson. Photo by Páll Stefánsson.

Benediktsson proposes regulations that limit the maximum share that can be held in financial companies. “I would consider 20 percent to be suitable in that regard.” He also called for stricter regulations on the amount that owners of financial companies can trade with their own companies, Morgunbladid reports.

MP for the Progressive Party Valgerdur Sverrisdóttir, who was minister of business affairs when the banks were privatized at the beginning of the millennium, also admitted that mistakes were made in the process.

“However, it is impossible to state that they were so serious that it could have made a difference in the current situation,” Sverrisdóttir said, contradicting Minister of Finance and chairman of the Left-Greens Steingrímur J. Sigfússon.

Sigfússon believes that the collapse of the banking system in October last year can be traced back, at least to some extent, to the privatization of the banks.

Click here to read more about the Independence Party reviewing its policies and analyzing the mistakes it made.

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