According to a new report undertaken by the Iceland Chamber of Commerce about the Icelandic financial system, financial analyst companies and markets are overestimating the risk facing the Icelandic economy.
The Chamber of Commerce also concluded that the pressure on Icelandic banks in relation to credit default swaps (CDS) is too high, Morgunbladid reports.
The report points out that following the financial bank depression in 2006, during which foreign analyst companies were keen to criticize the Icelandic banks, they made extensive changes in terms of their financing which improved their situation.
Richard Portes, one of the report’s two authors, claims Standard & Poor’s decision to change the credit rating for the Icelandic treasury from balanced to negative, is not based on solid arguments.
The report says the presence of the Housing Financing Fund (HFF) on the housing credit market and the existence of indexation are causing the inflation.
Click here to read more about Standard & Poor’s credit rating for Iceland.