Should the Privatization of the Icelandic Banks be Investigated? Skip to content

Should the Privatization of the Icelandic Banks be Investigated?

One of the controversies concerning the parliamentary report on the banking collapse in Iceland is that the committee did not agree on the need to investigate the privatization of the banks in 2002-3.

At the time, Landsbanki was sold to Björgólfur Gudmundsson and his son Björgólfur Thor Björgólfsson. The older Björgólfur was favored by then Prime Minister David Oddsson. Búnadarbanki was sold to members with strong relations to the Progressive Party, the other ruling party at the time.

Björgólfur Gudmundsson. Chairman of Landsbanki from privitization until the crash. Photo: Geir Ólafsson/Iceland Review

The group that took over the bank included Ólafur Ólafsson of Samskip, Finnur Ingólfsson, former vice-chairman of the Progressive Party and others. Búnadarbanki was then merged into Kaupthing.

Former Prime Minister Geir Haarde has publicly apologized for the way the two banks were privatized.

It comes as somewhat of a surprise that the chairman of the parliamentary committee, Atli Gíslason of the Left Green Party, did not want a special investigation of the privatization of the banks. His party has always been critical of the process of privatization and has said that the companies were sold to “private friends” of David Oddsson and then Progressive Party chairman Halldór Ásgrímsson.

Bjarni Benediktsson, Chairman of the Independence Party, said in a letter to party members this morning that he thought such an investigation could be agreed upon if other conditions were met. The members of the Independence Party and the Progressive Party on the parliamentary committee had said that there was no need for an investigation of the privatization of the banks. Sigmundur Dadi Gunnlaugsson, Chairman of the Progressive Party said in Althingi this morning that he did not oppose such an investigation. He said that the fate of the banks after the crash should also be investigated.

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