Straumur-Burdarás Criticizes Icelandic Authorities Skip to content

Straumur-Burdarás Criticizes Icelandic Authorities

Representatives of investment bank Straumur-Burdarás are dissatisfied with the course of events that led to its nationalization yesterday. Their account of the takeover differs from that of the Financial Supervisory Authority (FME) and Minister of Finance Steingrímur J. Sigfússon.

According to Straumur-Burdarás, the British Financial Supervisory Authority (FSA) asked about the status of the bank last Wednesday, requiring whether it would be able to meet its obligations this week, Fréttabladid reports.

Straumur-Burdarás replied that it would not prove difficult for the bank to meet its obligations and then referred the FSA to the FME as the bank’s supervisory authority in Iceland.

The bank’s representatives state that when the FSA asked the FME about Straumur-Burdarás’s status, employees of the FME replied that they didn’t know. This made executives within the FSA uneasy as it seemed that no one was supervising the bank.

According to Straumur-Burdarás, the bank’s CEO William Fall then discussed the matter with the FSA, which dropped the case. Then FME began investigating the case. Representatives of Straumur-Burdarás and the FME met on Friday and on Saturday the Central Bank joined in.

“I cannot understand how such a story begins. The FME followed the equity position and liquid cash position of companies very closely and our relations with the FSA have been outstanding,” said chairman of FME Gunnar Haraldsson.

Haraldsson added that both Icelandic and British financial supervisory authorities had been aware of the difficult situation at Straumur-Burdarás for some time.

Straumur-Burdarás also states that on Saturday the bank’s executives were offered to explain the bank’s situation to officials from the Ministry of Finance and Business Affairs, the Central Bank governor and three representatives of the FME.

They were given one hour to provide an explanation and in that time Straumur-Burdarás’s executives demonstrated that the bank could pay all impending debts.

Haraldsson also claims this story is untrue. “I find it very strange that individuals, who claim to have reliable sources about the course of events, are making such statements. I find it frightening.”

Minister of Finance Steingrímur J. Sigfússon also cannot recall the aforementioned meeting. However, he confirmed that Fall had called him on Sunday.

“He explained his point of view, which I took notice of. However, I didn’t tell him what we were going to do because it was not in my power to reach a conclusion then and there,” Sigfússon said.

Straumur-Burdarás states that Sigfússon had told Fall during their conversation that his consultants had advised him to have the state take over the bank.

Sigfússon said he had met with Straumur-Burdarás’s executives two weeks ago where they expressed their concern about the bank’s situation, adding that the FME, as an independent authority, made the decision to take over the bank.

Click here to read more about the nationalization of Straumur-Burdarás.

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