New Íslandsbanki CEO Aims to Restore Trust: “Challenging Times”

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The new CEO of Íslandsbanki, Jón Guðni Ómarsson, has stated that his priority is to restore trust in the bank. In an interview with RÚV yesterday, he admitted that the mood among the bank’s employees, following recent events, and in light of the public discourse, has been fraught.

“Challenging times”

On Wednesday morning, Birna Einarsdóttir, CEO of Íslandsbanki, announced her decision to step down. Birna’s resignation came on the heels of Íslandsbanki agreeing to pay a fine of ISK 1.2 billion [$8.8 million, €8.1 million] due to “serious and systematic violations” during the sale of the state’s 22.5% stake in the bank in March of last year.

At the same time, Íslandsbanki announced that Jón Guðni Ómarsson would be replacing Birna as CEO. “Naturally, these are very challenging times,” Jón Guðni told RÚV yesterday. “We need to throw ourselves back into our daily work and focus on taking care of our customers as well as we can.”

As noted by RÚV, Jón Guðni has been with Íslandsbanki for nearly two decades and served as the finance manager since 2011. Jón Guðni told RÚV that he did not participate in the sale of the government’s share in the bank. “I was introducing the bank to investors. Regarding the sale itself and the bank’s involvement in it, I did not take part.”

Jón admitted that the mood among employees, following recent events, and in light of the public discourse, has been fraught. “It has, of course, been a big shock for the employees and some customers, as well. It’s something we take very seriously and will take time to address; that’s the task that lies ahead.”

Rebuilding trust a priority

Jón Guðni admitted that he had not expected Birna Einarsdóttir to step down following the bank’s settlement with the Financial Supervisory Authority of the Central Bank (FME). This having been the case, however, it was now necessary to start repairing the bank’s reputation.

“First of all, we need to throw ourselves into implementing these changes that are requested in the agreement with the Central Bank.” One of the first issues under consideration is whether further personnel changes need to be made, although “no decisions have been made,” according to Jón Guðni. Other changes are yet to be revealed.

According to Jón Guðni, the priority is to restore customers’ trust in the bank. “First of all, it will take some time. We just need to dedicate ourselves to the project and implement these requirements requested by the Central Bank. All in all, we must show humility and roll up our sleeves,” Jón Guðni observed.

As noted by RÚV, FME’s report concluded that many of the things that went wrong at Íslandsbanki during the sale were to be ascribed to the bank’s corporate culture. Jón Guðni believes that a lot can be learned from the report while maintaining that the bank’s corporate culture is strong: “The risk and corporate culture in the bank is very strong in many respects. We simply need to ensure that this culture extends fully to all of the bank’s activities.”

FME Believes Íslandsbanki Broke the Law During March Sale

íslandsbanki sale iceland reykjavík

Íslandsbanki has started a conciliation process with the Central Bank’s Financial Supervisory Authority due to the bank’s possible violations of the law, RÚV reports. The bank’s employees were among the buyers in a closed bidding arrangement last March when the government sold a 22.5% stake in the bank.

Preliminary findings “taken seriously”

The Central Bank’s Financial Supervisory Authority (FME) believes that Íslandsbanki may have violated the provisions of laws and regulations, regarding the bank and its operations, during the sale of the government’s 22.5% stake in the bank last March, RÚV reports. This is the result of a preliminary assessment that Íslandsbanki has received.

The preliminary assessment states that the Financial Supervisory Authority has the authority to impose administrative fines for the violations. The agency is also authorised to conclude cases through a settlement in the event that the offender admits to the offences and submits to sanctions.

Íslandsbanki’s announcement to the Icelandic Stock Exchange states that a conciliation process has begun and that the bank’s management takes FME’s initial assessment seriously:

“A conciliation process has begun, and in the coming weeks, the bank will present its explanations and views on FME’s initial assessment. The bank’s management takes FME’s initial assessment seriously. As previously reported, the bank has already made changes to internal rules and processes and will continue such work during the reconciliation process.”

“Unable to comment at this time”

Edda Hermannsdóttir, Director of Communication for Íslandsbanki, told RÚV that Birna Einarsdóttir, Íslandsbanki’s Director, could not comment on the conciliation while it was ongoing.

As insinuated by RÚV, among the rules violated by Íslandsbanki was allowing employees to buy shares in what was a closed sales process; the bank announced in May that it would be changing its rules regarding its employees’ securities transactions:

“There has been a lot of discussion about the sales process and the arrangement employed. Among other things, the participation of the bank’s employees in the sale has been criticised. We take this criticism seriously and are currently working on changes to the bank’s rules regarding employees’ securities transactions,” Birna Einarsdóttir was quoted as saying in an article on Mbl.is last May.

RÚV states that the nature of the bank’s other possible violations has not been revealed.

MP calls Íslandsbanki’s press release pitiful

Sigmar Guðmundsson, MP for the Liberal Reform Party, called Íslandsbanki’s press release “pitiful” in a post on Facebook yesterday. “The bank’s offences are committed during the sale of public property, and the bank could have shown more initiative in providing information to this same public.” The director of the bank prefers to remain silent during this so-called conciliation process, Sigmar noted, a prerogative not available to other criminal offenders.

First Cryptocurrency Exchange Registers with Financial Supervisory Authority

The first company to specialize in cryptocurrency commerce and services is now registered with Iceland’s Financial Supervisory Authority, or FME, reports KjarninnMorgunblaðið reported first.

The company, Skiptimynt, is a cryptocurrency exchange dealing in Bitcoin and Auroracoin. Cryptocurrency firms are now required to register their activities with FME, following new legislation intended to combat money laundering and terrorist activities.

Crypto- or digital currencies have gained increased popularity on the international market in recent years, although the value of most have been subject to extreme fluctuations. The value of one Bitcoin is now roughly ISK 770,000 ($6,958/€5,986), but was worth as much as ISK 2,216,800 ($20,000/€17,208) at one point last year.