Thursday, February 25, 2010

Should taxpayers pay for bankers’ mistakes?

Iceland repayment talks collapse

Talks to agree how Iceland will repay more than $5bn of debt it owes to the UK and the Netherlands have broken down without agreement. In a statement, the UK and Dutch governments said they were "very disappointed that despite all the efforts over the past year and a half, Iceland is still unable to accept our best offer on the Icesave loan". Iceland plans to hold a referendum on the Icesave repayment on 6 March, but the government was hopeful it could reach a different deal ahead of that.

Posted by devo @ 09:53 PM (1015 views)
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6 thoughts on “Should taxpayers pay for bankers’ mistakes?

  • fallingbuzzard says:

    Should Icelandic taxpayers pay for the mistakes (greed) of UK/Dutch savers? Or even the subsequent mistake of the UK/Dutch government. No, I’m with Iceland on this.

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  • “(greed) of UK/Dutch savers?”

    Have a look at Nadeem Walayat’s commentary on comparative savings accounts at the time:
    http://www.marketoracle.co.uk/Article16265.html
    (Fast forward to the section starting “The IceSave rates were competitive but NOT the TOP PAYING RATES in the UK.”)

    I’m not saying that ordinary Icelanders should pay – not at all – but castigating savers trying to find a good rate for their cash seems a bit much. Iceland has to default and rebuild. It seems quite possible that we will default in the next few years as well. It’ll be interesting to see what the UK’s appetite for austerity is like in that situation.

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  • fallingbuzzard says:

    All savers are greedy if they invest over compensation limits. I think that article proves that Icesave savers were greedy. They could have opened with many different institutions and made their money safe but wanted to open one accouunt only. Most Icesavers that benefited from the extra rescue are very high net worth indvididuals so the UK taxpayer is funding the rich in the UK, since Iceland will never pay for the extras over the compensation limit.

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  • fallingbuzzard says:

    The UK has no appetite for austerity but will not default now as it has done in the past.

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  • No excuse for having money in ICESAVE – you were warned by Uncle Tom!:

    “8. david20040_0 said…Inbreda I do not invest in property at all, I put my money in ICESAVE.
    I just want a house price crash so one day I can get a house.
    Thursday, September 13, 2007 10:10PM

    uncle tom said…David,
    ICESAVE looks suspiciously like a Ponzi scam. If you don’t know what that is, Google it NOW!…”

    “If ICESAVE was fully legit, it wouldn’t be based in Iceland – the interest rates they offer are too high – more than they can recoup by lending the money safely (after admin costs and sound risk pricing) – so something ain’t right..

    Ponzi offered incredible returns by using new capital deposits to pay the interest on the existing deposits, creaming a nice wage for himself in the process. Eventually of course the whole thing imploded, demonstrating the need for financial regulation.

    Icelandic financial regulation – what financial regulation? Look at the size of the place, the size of the population and it’s financial history. Why has a bleak rocky island with a tiny population suddenly become so significant in the financial world?”

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  • The savers were not told that their banks were committing FRAUD. Possibly as part of an economic hit on the country. The bankers should go to jail, and the children and children’s children who decided to build up savings for the future, must not be slaves to these criminals.

    If a smelly tramp demanded 30% of your children’s wages to pay fraudulent debt, for life, you would punch him in the nose and tell him to sod off, but, the same tramp gets a hair cut, puts on a suit and has a facial, and we say sure, you need more silk ties, here is my child, take its money forever.

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