Why Iceland Will Not Pay Up

[wren]

Where are the Icelandic bankers who created this disaster?

Is no action being taken against them personally, not one?

(I know about paint being thrown at their houses in Iceland).

[hirop]

Great! So I as a taxpayer should pay Iceland's debt cos they don't fancy it.

I think it appears we are picking up the bill because the uk government steamed in to "save" uk investors and then attempted to bully iceland on terms of repayment.

It's ok everyone, forget your responsibilities, do what you like cos the good old British taxpayer will cough up.

That certainly seems to be the approach uk bankers have taken (and continue to do so), so why not for the Icelandic peeps?

The uk government, the uk financial regulators and uk financial advisor's are the people deserving of ire - not (by proxy) the citizens of iceland. Investments fail, that's life - our government can't handle it. If the outcome is non-repayment then some awkward questions will need to be asked of the people who allowed such businesses to operate within our shores, bullying iceland is just an attempt to avoid those questions.

[Urdur]

I used to think you were one of the smart ones but you clearly haven't read up on the Icesave affair. Basically, the Icelandic Government nationalised their banks. The Icesave deposits and assets did not just disappear, you know. They were taken by the Icelandic Government. Were you aware that ALL Icelandic savers were compensated 100%. But when it comes to meeting the deposit guarantees of British and Dutch deposits, all of a sudden, they can't afford it.

Seriously, I never imagined you would fall for Icelandic Government propaganda so readily.

Firstly...The Icesave money was not taken by the Icelandic Government..They were mostly lent to British operating retailers and individuals. Even tax from these deposits went to the UK..

If you don't believe me and still think that Iceland stole it, then may I remind you that Gordo the Clown used Anti terrorism, crime and security laws against Landsbanki (i.e. the Icelandic government) and froze all it's assets for 9 months. So even if Iceland wanted to steal the money, they couldn't have.

Secondly..The only Icelanders that were compensated were people that had been fooled by the banks into putting their saving into some shaky funds. These funds were not covered by the deposit guarantee system so the Icelandic government used government funds to limit their loss to about 70%.

Regular savers were however promised that if the "new" banks which now held their savings would also crash due to the uncertainty at that time, then the government would also use government funds to cover those savings.

The ONLY reason why the Icelandic government promised to cover these deposits, was to stop a run on the newly established banks that had already begun which would have caused them to crash for the second time. They still haven't crashed so this promise to pay out, has never been put to the test...

[Urdur]

Where are the Icelandic bankers who created this disaster?

Is no action being taken against them personally, not one?

(I know about paint being thrown at their houses in Iceland).

Yes..paint is being thrown on their houses In Reykjavík..but they don't dare showing their faces here..

I can give you their address in London though

[1929crash]

We decided to stay, and that sign of weakness guaranteed that the first talks ended in deadlock. So did subsequent negotiations held in London — though the failure may have been, in part, the result of Government Hospitality’s decision to feed the Icelandic foreign minister on what was clearly frozen scampi.

What an excellent article.

I hope they drown Brown in the 1912 pool!

[tahoma]

Guess what percentage of Iceland's electricity and heating is sourced from fossil fuels?

0.1%.

I know where I would rather be in a few years, when oil prices rocket. Plus, there is only 320'000 of them with a proud, unified culture - equivalent of Coventry on a big island. Utterly sustainable, without any of the hand-wringing and self-inflicted social issues we suffer.

I'm sure Harperson is enraged that women there automatically take their Father's name though. Quick, invade!

[SNACR]

The UK government was clearly obligated to pay up to the deposit protection limit if its regulator had endorsed the investment. It was the UK government's catastrophic decision to compensate total loss which was clearly insane. Effectively forced into this by lack of confidence in its own shaky banking system.

The Icelandic population has no obligation whatsoever to pay this bill through taxation.

[1929crash]

Guess what percentage of Iceland's electricity and heating is sourced from fossil fuels?

0.1%.

I know where I would rather be in a few years, when oil prices rocket. Plus, there is only 320'000 of them with a proud, unified culture - equivalent of Coventry on a big island. Utterly sustainable, without any of the hand-wringing and self-inflicted social issues we suffer.

I'm sure Harperson is enraged that women there automatically take their Father's name though. Quick, invade!

And no Macdonalds!

[mightytharg]

As I understand it, through a mixture of corruption and bad luck, some Icelandic banks went bust. They owed more to depositors than they could pay out,

Say there was 5 billion in the kitty, and 10 billion owed to depositors (5 billion to Icelanders and 5 billion to the English and Dutch).

A fair way would be to pay out everyone equally, a proportion of their deposits (with a bit extra for small depositors thanks to government guarantees).

Instead the thieving Icelanders decided to keep all the money for themselves and give nothing to the foreign depositors.

The strangest is that many of you idiots seem to support them.

(Apologies if I haven't understood the situation, but this seems to be more or less what happened)

[SNACR]

And the citizens can say No. And the state will default. Happens all the time. You seem to be suggesting that there's a right of action against every Icelandic taxpayer.

Future UK taxpayers didn't have to pay up either, but we've got a state attached to a banking industry and it would be "catastrophic" to destroy that attachment!

As Iceland was not a member of the EU it should have been clear that any financial guarantees it offered were likely to be unenforceable.

[Cygnus Alpha]

And the citizens can say No. And the state will default. Happens all the time. You seem to be suggesting that there's a right of action against every Icelandic taxpayer.

Future UK taxpayers didn't have to pay up either, but we've got a state attached to a banking industry and it would be "catastrophic" to destroy that attachment!

In all fairness. I never suggested any such thing. You did though!

[SNACR]

As I understand it, through a mixture of corruption and bad luck, some Icelandic banks went bust. They owed more to depositors than they could pay out,

Say there was 5 billion in the kitty, and 10 billion owed to depositors (5 billion to Icelanders and 5 billion to the English and Dutch).

A fair way would be to pay out everyone equally, a proportion of their deposits (with a bit extra for small depositors thanks to government guarantees).

Instead the thieving Icelanders decided to keep all the money for themselves and give nothing to the foreign depositors.

The strangest is that many of you idiots seem to support them.

(Apologies if I haven't understood the situation, but this seems to be more or less what happened)

The money simply will not have been there it will have been loaned out to businesses that were then struggling to repay the loans. There was much less value in the businesses to be realised post-crash.

I still think the problems were mainly hubris and incompetence rather than widespread corruption and criminal intent.

[okaycuckoo]

In all fairness. I never suggested any such thing. You did though!

In all fairness, that's the logic of your argument.

It's clear there is no direct liability for Icelandic taxpayers, otherwise there would have been no need for their parliament to pass legislation. Simples.

[Cygnus Alpha]

In all fairness, that's the logic of your argument.

It's clear there is no direct liability for Icelandic taxpayers, otherwise there would have been no need for their parliament to pass legislation. Simples.

No, the logic of my argument is that Iceland does owe this money because it does. So don't make up things I didn't actually say.

[Injin]

No, the logic of my argument is that Iceland does owe this money because it does. So don't make up things I didn't actually say.

Pffft.

Some people have prmised to rob a load of other people and those other people aren't having any of it.

What's the problem?

The looting has to stop sometime, why not here?

[Guest Steve Cook]

I used to think you were one of the smart ones but you clearly haven't read up on the Icesave affair. Basically, the Icelandic Government nationalised their banks. The Icesave deposits and assets did not just disappear, you know. They were taken by the Icelandic Government. Were you aware that ALL Icelandic savers were compensated 100%. But when it comes to meeting the deposit guarantees of British and Dutch deposits, all of a sudden, they can't afford it.

Seriously, I never imagined you would fall for Icelandic Government propaganda so readily.

Were the Icelandic people consulted for their permission to take on the nationalised debt obligations of Icesave?

Somehow I doubt it.

That being the case, if the icelandic people were not privy to the profits and also did not give permission to take on the debt obligations when things went tits up for the company, they most certainly do not have a moral obligation to take responsibility for those obligations.

To bring this a little closer to home, imagine an analogy where your local council took on the debt of a local bookies who had f*cked up it's finances and they didn't ask you (the local council taxpayer) for permission. As a consequence, your next ten year's council tax bills were going to be 20% higher.

You think the above would be OK?

Edited January 9, 2010 by Steve Cook

[Cygnus Alpha]

Firstly...The Icesave money was not taken by the Icelandic Government..They were mostly lent to British operating retailers and individuals. Even tax from these deposits went to the UK..

If you don't believe me and still think that Iceland stole it, then may I remind you that Gordo the Clown used Anti terrorism, crime and security laws against Landsbanki (i.e. the Icelandic government) and froze all it's assets for 9 months. So even if Iceland wanted to steal the money, they couldn't have.

Secondly..The only Icelanders that were compensated were people that had been fooled by the banks into putting their saving into some shaky funds. These funds were not covered by the deposit guarantee system so the Icelandic government used government funds to limit their loss to about 70%.

Regular savers were however promised that if the "new" banks which now held their savings would also crash due to the uncertainty at that time, then the government would also use government funds to cover those savings.

The ONLY reason why the Icelandic government promised to cover these deposits, was to stop a run on the newly established banks that had already begun which would have caused them to crash for the second time. They still haven't crashed so this promise to pay out, has never been put to the test...

Yes, the money was taken by the Icelandic Government. The assets of those loans to British operating retailers now belong to the Icelandic Government. So no I don't believe you. The UK Government did freeze assets that were held in the UK to pretend them nicking all of it. If the money just evaporated, how do you imagine that the Iceland Government managed to find the money to pay it's own citizens 100% but decided to pay UK citizens 0%. Not even the most rabid anti-British racist would think that was fair. Once again, we the British are being treated as mugs. And yet you apologise for it.

[Cygnus Alpha]

Could you please show the working where the UK govt. choosing to meet a liability [ie stumping up a few billion to bailout

Icesave depositors] will result in directly increased taxes for me or other 'taxpayers' ?

Where did I claim that it would directly increase taxes for you and other taxpayers? I said the UK taxpayer would have to foot the bill, this is true unless you believe that no one would foot the bill and the debt just vanishes.

[Cygnus Alpha]

As I understand it, through a mixture of corruption and bad luck, some Icelandic banks went bust. They owed more to depositors than they could pay out,

Say there was 5 billion in the kitty, and 10 billion owed to depositors (5 billion to Icelanders and 5 billion to the English and Dutch).

A fair way would be to pay out everyone equally, a proportion of their deposits (with a bit extra for small depositors thanks to government guarantees).

Instead the thieving Icelanders decided to keep all the money for themselves and give nothing to the foreign depositors.

The strangest is that many of you idiots seem to support them.

(Apologies if I haven't understood the situation, but this seems to be more or less what happened)

That is exactly it in a nutshell though I don't know the exact figures. It's not that they are all idiots though. Some of them just lap up the propaganda from the Icelandic Government without thinking to challenge it.

[huw]

Basically, the Icelandic Government nationalised their banks. The Icesave deposits and assets did not just disappear, you know. They were taken by the Icelandic Government. Were you aware that ALL Icelandic savers who had kronur deposits were compensated 100%.

I added the bold bit. Icelandic depositors with pounds, euros or whatever were treated the same as British and Dutch depositors with pounds, euros, or whatever.

I guess that any British and Dutch savers who had kronur deposits would have been refunded -- after all, that currency could be printed as needed, so why not?

The nationalisation is a complete red herring, it's a question of depositor insurance not of who owns the bank. The deposits and assets were lost through poor investments/bad loans, if they hadn't been then the banks would have been solvent.

[Cygnus Alpha]

Were the Icelandic people consulted for their permission to take on the nationalised debt obligations of Icesave?

Somehow I doubt it.

That being the case, if the icelandic people were not privy to the profits and also did not give permission to take on the debt obligations when things went tits up for the company, they most certainly do not have a moral obligation to take responsibility for those obligations.

To bring this a little closer to home, imagine an analogy where your local council took on the debt of a local bookies who had f*cked up it's finances and they didn't ask you (the local council taxpayer) for permission. As a consequence, your next ten year's council tax bills were going to be 20% higher.

You think the above would be OK?

Ha ha ha. Your council tax example is hilarious because that is exactly what is happening. Many local authorities deposited money in Icelandic banks. And unless they can get their money back off the nationalised Icelandic banks, there could well be increases in council tax bills.

So let me turn the question back on you. If your council tax bills for the next 10 years were going to be higher, would you still be cheerleading Iceland reneging on the debt?

[Guest Steve Cook]

Yes, the money was taken by the Icelandic Government. The assets of those loans to British operating retailers now belong to the Icelandic Government. So no I don't believe you. The UK Government did freeze assets that were held in the UK to pretend them nicking all of it. If the money just evaporated, how do you imagine that the Iceland Government managed to find the money to pay it's own citizens 100% but decided to pay UK citizens 0%. Not even the most rabid anti-British racist would think that was fair. Once again, we the British are being treated as mugs. And yet you apologise for it.

Ice save was run by a bunch of thieves

The icelandic government have paid gauranteed deposits to icelandic savers out of icelandic taxes as far as I am aware. Alternatively, to the extent they have paid for those gauranteed deposts out of existing icesave assets, then they are also thieves, since if they were going to do that, then they should have shared what there was equally between all depositors irrespective of nationality. Personally I am unsure where the money for the deposit gaurantee payments to the Icelandic savers comes from.

However, none of the above has got anything to do with the wider icelandic population. Why are they to be held responsible for a useless company and a corrupt government?

[wren]

As Iceland was not a member of the EU it should have been clear that any financial guarantees it offered were likely to be unenforceable.

Iceland is a member of the EEA which I think covers banking responsibilities.

I'm not familiar with the legal details though.

[Guest Steve Cook]

Ha ha ha. Your council tax example is hilarious because that is exactly what is happening. Many local authorities deposited money in Icelandic banks. And unless they can get their money back off the nationalised Icelandic banks, there could well be increases in council tax bills.

So let me turn the question back on you. If your council tax bills for the next 10 years were going to be higher, would you still be cheerleading Iceland reneging on the debt?

I'm not cheerleading "Iceland" renaging on their debt. I am cheerleading Icelandic taxpayers refusal to take on someone else's debt.

British taxpayers should also say f*ck off to other people's debt's just like the icelandic taxpayers have.

Edited January 9, 2010 by Steve Cook

[Cygnus Alpha]

I added the bold bit. Icelandic depositors with pounds, euros or whatever were treated the same as British and Dutch depositors with pounds, euros, or whatever.

I guess that any British and Dutch savers who had kronur deposits would have been refunded -- after all, that currency could be printed as needed, so why not?

The nationalisation is a complete red herring, it's a question of depositor insurance not of who owns the bank. The deposits and assets were lost through poor investments/bad loans, if they hadn't been then the banks would have been solvent.

You are right, it is a matter of depositor insurance. But who owns the bank is also relevant. Let me give you the example of Northern Rock. When the UK government nationalised it, it did not just nationalise all the bad bits. It also nationalised some nice juicy assets as well. There might have been a shortage of assets to cover all liabilities, but the assets did not just all disappear.

Had Icesave gone bankrupt, who knows. depositors might have got 80p in the pound over and above the depositor guarantee. Instead, we're told it is 0p in the pound.