Economist Slams Banking System

Gylfi Zoega, economy professor and member of the Icelandic Central Bank’s financial advisory board, says that needlessly high salaries of bank managers coupled with obtuse financial information provided by banks and an increased reliance on electronic monetary transactions have caused distrust of the bank sector among the public, RÚV reports.

Gylfi spoke at a meeting of Iceland’s Financial Supervisory Authority this morning, severely criticising the lack of information flow to the public, which in turn caused more risk taking in financial matters. He explained that the bank sector’s drive to maximize profits manifested itself in myriad of ways. “People have been talking about increasing trust towards the banking system, but why should anyone trust it?” Gylfi asked bluntly. “In order for people to trust you, you have to be trustworthy, and we’re coming up short.”

Gylfi went on to say that the banks had a vested interest in keeping the public uninformed in terms of bank rates, which had allowed the bank sector to become rich and bloated. “I’m told it will cost seven billion ISK to build Landsbankinn’s new headquarters in downtown Reykjavík,” an indignant Gylfi explained. “That’s ten times more expensive than that wall on the Mexican border proposed by the American president. Why? This money belongs to the public.”

Furthermore, Gylfi criticised the bank sector’s increasing reliance on computers, saying that working out financial matters in a computer can drastically cloud the general public’s judgement. “A computer has no judgement and the banking system needs judgement.”