Representatives of five Icelandic pension funds are currently discussing the possibility with Icelandic authorities of acquiring a majority stake, 51 percent, in Kaupthing Bank, which has now been nationalized.
“We have been working on this for the past few days, looking into whether we can participate in some way and reclaim some of the funds that we have lost [when Kaupthing was nationalized],” director of the Pension Fund of Commerce Thorgeir Eyjólfsson told Fréttabladid.
Eyjólfsson said the discussions with representatives of the government had been informal but that the ideas presented by the pension funds had been well received. “The backbone would be domestic operations. Foreign operations would be very limited.”
Minister of Industry Össur Skarphédinsson said he is very pleased with the proposed ideas. “It would be a bold play by the pension funds to defend their assets. It is clear that much is at stake […] and I believe it is much better […] that there is one private bank operating [in Iceland] as counterbalance to the state-run banks which clearly will be operated here for a while.”
Skarphédinsson said the pension funds will play an important part in the reconstruction of the Icelandic economy. “I believe Iceland will be quicker to shake off the numbness and rise more rapidly from the ashes than people realize. The pension funds with their social-minded goals as a guiding light will prove a powerful tool in the reconstruction process […]. Such a bank will grow well and could give the funds a good return of their money.”
The pension funds will decide today whether they will make a formal offer for a majority stake in Kaupthing Bank.