PM: Landsbanki’s Assets May Cover Icesave Skip to content

PM: Landsbanki’s Assets May Cover Icesave

There is a good chance that the assets of Landsbanki Bank can cover most of the Icesave deposits in Britain and the Icelandic government is determined not to let the current economic situation ruin the long-standing friendship between Iceland and Britain, Iceland’s Prime Minister Geir H. Haarde said at a press conference yesterday.

Haarde’s statement came as a reaction to an announcement made by British Chancellor of the Exchequer Alistair Darling and Prime Minister Gordon Brown yesterday morning that Icelandic authorities did not indent to secure the deposits of Icesave in Britain and that they would therefore take legal action against Iceland, Morgunbladid reports.

At yesterday’s press conference, Haarde iterated that the total debts of the Icelandic banks had become higher than the national economy could sustain and that Icelandic authorities were therefore unable to cover all debts.

“But of course we will undertake it is such a way that claimants are not being discriminated against, regardless of their nationality, and committees [on behalf of the Financial Supervisory Authority (FME)] and those who are responsible for the operations of the banks now will have to sort it out,” the prime minister said.

Haarde emphasized that Iceland’s state treasury would honor all its debts. “It is first and foremost its reputation that we want to protect. We do that, among other things, by saying honestly to people: Iceland’s state treasury cannot be responsible for paying all of the debts which private companies in the financial market—the banks—have piled up.”

The prime minister then stated that the governments of Iceland and Britain are seeking a satisfactory solution for everyone involved. In response to a question on what would happen if Britain pursues the lawsuit, Haarde said, “Then we will just have to solve that disagreement in court. There is nothing wrong with that as such.”

Haarde was also asked about the deposits of Icesave account holders in the Netherlands to which he replied that those matters were not as far ahead as in Britain.

Iceland’s Minister of Commerce Björgvin G. Sigurdsson also spoke during yesterday’s press conference, emphasizing that Iceland did not intend to run away from its responsibility like many people in Britain seem to fear.

Sigurdsson stated that deposits will be prioritized in case of a receivership which means that account holders will be the first to receive benefits from the bankrupt estate of Landsbanki Bank. “What remains will naturally be a matter of agreement between these two great friendly nations.”

Landsbanki Bank launched online Icesave savings accounts, both in the UK (since October 2006) and in the Netherlands (since May 2008), offering what they claimed were the best possible interest rates. The British website of Icesave is currently inoperable.

A great many foreign journalists have come to Iceland to cover the financial crisis and according to Morgunbladid, such a large press conference as yesterday has not been held in Iceland since the Reagan-Gorbachev summit in Reykjavík in 1986.

Click here to read more about Britain’s threat to sue Iceland and here to read about the Icelandic authorities overtaking Glitnir and Landsbanki banks.

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