New Book: UK Tried to Close Landsbanki in August Skip to content

New Book: UK Tried to Close Landsbanki in August

According to a new book on the banking collapse in Iceland by former editor of Morgunbladid Styrmir Gunnarsson, Umsátrid – fall Íslands og endurreisn, the British Financial Supervisory Authority had threatened to stop Landsbanki’s operations in the UK in August 2008 if the Icesave deposits weren’t transferred into a British subsidiary.

The headquarters of Landsbanki in Reykjavík. Photo by Páll Stefánsson.

In an effort to keep their operations in the UK going, Landsbanki’s executives requested a loan from the Central Bank of Iceland of GBP 2.5 billion (USD 4.2 billion, EUR 2.8 billion)—at that time almost ISK 390 billion, which was one third of Iceland’s gross national product, Fréttabladid reports.

Former Minister of Business Affairs Björgvin G. Sigurdsson has confirmed Gunnarsson’s story. He said he had discussed the matter with his British counterpart in early September and at that time a solution seemed to be in sight.

However, the bankruptcy of Lehman Brothers upset the procedure and later led to the collapse of Landsbanki, Sigurdsson explained.

In the same book, Gunnarsson poses the question as to whether the actions or lack of actions by Geir H. Haarde’s government at the time of the collapse were in breach of law on ministerial responsibility and whether some ministers should be brought to trial because of it, Morgunbladid reports.

“I have no idea whether that will happen, but I write about this issue this way because of comments made by Páll Hreinsson, chairman of the Althingi parliament’s investigation committee, late last summer,” Gunnarsson said.

Click here to read more about Icesave.

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