Below is the Interview taken last night at the BBC with Ólafur Ragnar Grímsson, President of Iceland, because of his stand in regards of Icesave. The Interview starts with a short introduction of the matter and then goes ahead into the interview.
Comments are closed.
[…] BBC Newsnight interview with the Icelandic president […]
Only just seen this Fisy.
Not sure how many times I have to tell you that I’m not a member of some “Team UK”. But, if we were members of Team RespectiveCountry, it’s interesting that I don’t have this sort of problem with Bjarni of Team Iceland. But I do with you. Perhaps because he directly addresses points?
Anyway, back to the point. Despite you saying I’m perfectly consistant, you were in early 2009 definitely putting forward those letters as unequivocal guarantees by the Icelandic state. Not “if we can push it through Althingi” guarantees.
Here’s what was actually said:
—————-
BROMLEY: None of those statements say that the government will accept responsibility for the guarantee. They do say that it will assist, support and generally do what is right, but would a “responsible government” take on massive state debt that it was not required to just as its economy exploded?
BROMLEY: They certainly do not carry any weight when compared to a statement in a conversation between the finance ministers of two countries.
FISY: What? You seem have strange understanding of diplomacy and how it work. Written communications good as gold in are af diplomacy.
——————
So, in two posts, you manage to fail to acknowledge that you were wrong then and you fail to acknowledge that my interpretation of the letters back then survives our more recent discovery of the requirement of Althingi sign-off for this sort of thing. Did you even read the relevant part of thread that you linked to?
You may think it minor now, but back then it was a cornerstone of your firmly held position that Iceland had said that it would honour the state guarantee.
A position held valiantly in the face of basic English comprehension skills :) . Your last desperate tangent that I remember was saying that words like “support”, “assist” etc. had a legal meaning that was at odds with their usual everyday meaning.
More from my last post Above as after reading again I think I understand why Brumley did post that strange ” solid gold communications ” comment
In my post I did post the usual information and facts like I always do but instead did Brumely did post some strange comment about position changing.
He is trying like other UK team here..
–since tide did turn after press and world did turn heads onto details after Ólafur Rangar did refuse to sign law to try —
and discredit us factual posters. He very desperately is trying to find non consistency or factual error to under mine credibility of posts.
Why else write his post on such a small trivia.
So just to point out what minor think you were talking about I after scatching my head realized it is this line in post I made above that you was talking about :
” Letter from Icelandic Ministry of Business Affairs to HM Treasury where it is maintained that the GOI will help TIF to stick to its commitments. Dated October 5, 2008 ”
Well sorry there Brumley but as many my posts, I did copy paste this descriptions of the three letters from official index of documents at evropuskrifstofan.is .
If you had botther to do your research you would have found that before you did post you silly ness about me ” changing my tune “.
But at least now I under stand what he was talking about. Team UK is getting ruffled and trying to grab on any thing they can as they case sinks slowly into the sea from force of people watching ****ed off at bullying of Iceland by UK and Holland and they greed..
when Icelander has bedfore said we would pay the 5.5% August and still they threw it back to us for them to try and make more good money from ” Ragnar Hall ” issue.
>+++Here in this threads is that ongoing disputing about this aspect
>between Brumley and Fisy where Brumley does make some quite unusual
>interpretations of plain English langauge written in letters ( you have to read down ) :
>https://www.icenews.is/index.php/2009/02/16/kaupthing-sweden-sold-to-finns/#comment-65449
>https://www.icenews.is/index.php/2009/07/29/more-members-of-parliament-against-the-icesave-deal/#comment-88915
Brumley wrote :
>See you’ve changed your tune about solid gold communications Fisy. No way did you present those letters as “GOI will help TIF to stick to its commitments” when we last talked about it.
You are ruffled aren’t you.
I’m perfectly consistant as you know just as more facts do come out I find more facts to justify my positions. You can’t say that can you ?
But feel free to post examples of exactly how I’ve ” changed my tune “. ( But no empty huffing and puffings please. )
that is the most uneducated interview I have ever sen from jeremy paxman. What a fool!
” people elect a government, governments make agreements in good faith…” = with the power given too them by the people, and it must be said that if the people get to have a say in finalising that agreement = democracy.
its an embarrasement the insulting/lack of manners, and respect jeremy uses towards an elected head of state of a souvereign, democratic country. Uneducated, snotty little brat and a dissapointment to the BBC. Try to get tv hosts of a quasi serious news program that know his subject, and how democracy relly works.
INSULTING!
See you’ve changed your tune about solid gold communications Fisy. No way did you present those letters as “GOI will help TIF to stick to its commitments” when we last talked about it. As you say, you and I have since learnt that it was just toilet paper without a law.
Ultimately, any failure of the UK government to consult its resident Iceland expert (assuming it has one) is just that. However, likewise the failure of the Icelandic government (led by the IP that you’ll be voting for ASAP). Who had most to lose and who was most aware of Icelandic law?
>Mr Darling the reason the language is as it is is that first they must by law get the state guarantee agreed by parliament
And, I see, you’re again ignoring the fact that Mathiesen didn’t say anything like that when he could. If he had said that they were pushing it through parliament the next day, then I’m certain things would be different. But he didn’t because he wasn’t intending to honour the guarantee.
See my point above about knowledge & risk.
To Fisy:
>>>>If I to designate the ** best ** overall example ** of threads where new ground was broken in understanding of issues of this dispute it is this thread…
https://www.icenews.is/index.php/2009/07/29/more-members-of-parliament-against-the-icesave-deal/
I agree with Fisy, this is also one of my favorite IceNews threads. If anyone new here wants to get very thorough discussion/debate on almost every matter regarding Icesave and fully understand why current agreement is so totally unacceptable for most people in Iceland, this is it. It is well worth reading, if you have the time – it has over 200 comments :-).
For new readers here, and due to poor search facilitiy here at IceNews, etc. here are two particualrly meaty threads of current discussion to follow :
https://www.icenews.is/index.php/2010/01/07/the-emergence-of-icesave-empathy-for-iceland-in-uk-media/comment-page-1/
https://www.icenews.is/index.php/2010/01/06/iceland-and-uk-ministers-to-hold-meeting-this-evening/comment-page-1/
And here is a comprehensive link list of much earlier threads where a lot of basic facts about whole IceSave matter and UK and Icelandic actions is discussed ( we are talking about 100s of relevant posts ) :
https://www.icenews.is/index.php/2010/01/05/icesave-agreement-rejected-by-icelandic-president/#comment-108800
If I to designate the ** best ** overall example ** of threads where new ground was broken in understanding of issues of this dispute it is this thread :
https://www.icenews.is/index.php/2009/07/29/more-members-of-parliament-against-the-icesave-deal/ ( an IceNews classic discussion )
On Jan 8, 2010, Fisy said:
>>So far I am not aware of any statements made by up to Jan 2009 Icelandic government that are found so far to be false about IceSave
Bromley86 reply :
>What about the letters promising to honour the guarantee (and here I use your interpretation and not mine :) )?
The burden is to you to point out what exactly part of statments made by Davið, Geir, Árni M. or Björgvin G. Sigurðsson in UKs letter in August/October 2008, or convesation between Árni and Darling etc you are talking about. By all means bring it here.
My point which you deliberately pretend to miss is that HM Treasury should not be making internatonal policy decision without knowing about country’s laws they are dealing with.
If Darling had bothered to liase with UK Foreign Office who have people that do know Iceland and its laws it might perhaps have helped situation would it not ?
Darling would have got explanationof that you keep on saying are ” soft ” statements — which is your main arguments again and again+++ about the guarantee — that they are ” soft ” statements so that is why Darling and Brown did what they did..
..well if Darling had bothered to get advice from Foreign Office they would have explained :
” Mr Darling the reason the language is as it is is that first they must by law get the state guarantee agreed by parliament. But as the ruling coalition of Independence Party and Social Democrats have a clear majority then that is not an issue. ”
That is why Darling looks even worse now the understanding of Icelandic parlimant needing to approve guarantee is understood my many more in world thanks to publicity of Ólafur Ragnar refusing to sign Dec law.
+Letter from HM Treasury to Icelandic Ministry of Business Affairs with questionsabout TIF. Dated August 7, 2008
Letter from Icelandic Ministry of Business Affairs to HM Treasury replying to letterfrom August 7. Dated August 20, 2008
Letter from Icelandic Ministry of Business Affairs to HM Treasury where it is maintained that the GOI will help TIF to stick to its commitments. Dated October 5, 2008
+++Here in this threads is that ongoing disputing about this aspect between Brumley and Fisy where Brumley does make some quite unusual interpretations ( you have to read down ) :
https://www.icenews.is/index.php/2009/02/16/kaupthing-sweden-sold-to-finns/#comment-65449
https://www.icenews.is/index.php/2009/07/29/more-members-of-parliament-against-the-icesave-deal/#comment-88915
Thanks Sillinn but, as has become apparent, it really doesn’t matter what anyone in Iceland says. Until the Althingi pass a law, the President signs it and (in this last case) the people okay it, all statements by politicians are statements of intent not fact.
As for what the President said, there although 96/2009 does acknowledge the debt (whilst saying that it will challenge it), it’s not acceptable to the UK/NL. So it really doesn’t make up for 9 months of trying very hard to avoid the state guarantee.
The current position of the Icelandic government (not their fault, mind, it’s been forced upon them) appears to be:
1. We acknowledge the debt
2. We cannot agree to the terms offered
3. We cannot secure financing elsewhere
Try that with your mortgage :) .
To Niels:
>>>>Isn’t it true that leading icelandic politicians like Grimsson travelled around the UK in order to promote Icesave when it started operating there?
Although I do not have the particular details, I think I saw something on that and it is probably correct.
During the bubble-years, Olafur Ragnar often helped out with promotion for the banks and the ‘vikings’, which really hurt his standing with the general public after the crash.
Bromley86 wrote – “What about the letters promising to honour the guarantee (and here I use your interpretation and not mine :) )?”
“The new law from 30.December 2009 that Mr. Grimsson refused to approve have nothing to do with paying or not UK and Dutch back for IceSave.:
“In the light of all the aforesaid, I have decided, according to Article
26 of the Constitution, to refer this new Act to the people. As stated in the
Constitution, the new Act will nevertheless become law and the
referendum will take place “as soon as possible.”
If the Act is approved in the referendum then naturally it will remain
in force. If the referendum goes the other way, then the Act No. 96/2009,
which the Althingi passed on 28 August, on the basis of the agreement
with the Governments of the United Kingdom and the Netherlands, will
continue to be law, recognizing that the people of Iceland acknowledge
their obligations.”
You can see the whole declaration here
http://dl.dropbox.com/u/3133573/President_of_Iceland_declreation_january_5_2010_English.pdf
peace!
Larouche proud of Iceland and its President
http://www.larouchepac.com/node/13060
>So far I am not aware of any statements made by up to Jan 2009 Icelandic government that are found so far to be false about IceSave
What about the letters promising to honour the guarantee (and here I use your interpretation and not mine :) )?
To Peter – London:
>>>>Interesting idea, but you have give your government the ability to speak and act on your behalf, to make promises and take up loans, they have obviously done it before and many times, Iceland would not have international debts of 60billion otherwise.
Obviously, when the government takes loans (which always have to be passed as laws through Althingi), they make full commitment to pay it back. The 60 billion you mention was taken by the private banks, and except for the Icesave deposit guarantee, no one has yet made any claims that those debts will somehow become the government responsibility.
According to statements by former Icelandic bank managers, foreign banks were virtually begging them to borrow, during the height of the bubble.
>>>It doesn’t matter that you think that politicians cannot make promises or commitments on your behalf, they have.
According to the constitution, whatever the politicians say or promise has no meaning legally, until it is backed up by laws passed by Althingi and signed by the President. Normally this is never a problem, since the government typically has a secure majority in the parliament and can push any laws through there they wish.
>>>>If you have an issue with what your politicians have done then they should be prosecuted under Icelandic law.
We are working hard on that. There is a special parliament investigative committee which will submit a 1500+ page report next February, they have been working on for the last year. According to the constitution, if they find any serious wrongdoing committed by government officials, Althingi can convene a special court, which is called Landsdomur, to prosecute those involved.
@Bjarni and Fisy,
Isn’t it true that leading icelandic politicians like Grimsson travelled around the UK in order to promote Icesave when it started operating there?
Bjarni said :
>I would personally never believe any politician, that said anything, about anything. I rather check the facts myself.
Exactly. When it comes to Peter though generally if I assume what every thing he posts here is false I will be right 80% of time.
>I think its definitely safe to say, that not everything that the Icelandic government said before or during the crash, was factually correct.
So far I am not aware of any statements made by up to Jan 2009 Icelandic government that are found so far to be false about IceSave.
So as we cannot debate on ghosts over to you Peter to bring some new facts to the surface.
But you had better know that the had better be verifiable and factual ( you know Peter, as that is definition of facts ).
>I think giving an arbitrary border of 5 % is not correct since things like inflation must be taken into account too. In the past Iceland had some incredible interest rates of 15% but with inflation at 12 % this made the nominal interest just 3 %.
Fair enough, just in case I was not clear, I am talking about return adjusted for inflation.
I am talking about the actual real return expected.
“I think its definitely safe to say, that not everything that the Icelandic government said before or during the crash, was factually correct.”
I referring to the statements made by an Icelandic politician about Icesave when they were doing publicity interviews in the UK at Icesaves launch, long before the crash.
“Well, that may be the case in UK, but it is DEFINITELY NOT the case in Iceland. We would never give that kind of power to politicians or other government officials.”
Interesting idea, but you have give your government the ability to speak and act on your behalf, to make promises and take up loans, they have obviously done it before and many times, Iceland would not have international debts of 60billion otherwise. It doesn’t matter that you think that politicians cannot make promises or commitments on your behalf, they have. If you have an issue with what your politicians have done then they should be prosecuted under Icelandic law.
To Peter – London:
>>>>So the icelandic government was running a little deception when its was telling potential depositors it was safe to put their money in an icesave?
I think its definitely safe to say, that not everything that the Icelandic government said before or during the crash, was factually correct. And, in my view, definitely the same would apply about the UK government, or in fact most governments. They simply had no understanding of how vulnerable their financial systems were and how bad the situation was. Therefore many of their statements can easily be shown afterwards to be just plain wrong.
I would personally never believe any politician, that said anything, about anything. I rather check the facts myself.
>>>>I say that when a high level government official makes a promise in order to obtain financial benefit and at no point is that is that promise denied then that is a contract.
Well, that may be the case in UK, but it is DEFINITELY NOT the case in Iceland. We would never give that kind of power to politicians or other government officials.
It would be useful to hear about exactly what statements you are actually referring to above.
Hi Fisy,
While I have understanding for the present icelandic position I do not agree with some things you wrote in your comment from the 7th of jan.
“>comparing bank account with an investment
The question is, when does an interest bearing instrument ( whatever it is ) stop being viewed as simple demand deposit and because of its interest premium become an investment ?
I would say that is above around 5% per year because that is rate of growth averaged over time that you can get just by buying passively in the stock market.
”
I think giving an arbitrary border of 5 % is not correct since things like inflation must be taken into account too. In the past Iceland had some incredible interest rates of 15% but with inflation at 12 % this made the nominal interest just 3 %.
Probably it is better to differentiate beween deposit and investment using legal terms: a deposit is covered by some deposit guarantee system and an investment is not.
I had a quick look at wikipedia (sorry) and they gave the following definitions:
deposit: the liability owed by the bank to its depositor
investment: the dedication of resources or assets to creating financial benefits in the form of income or profit in the future.
These are very good definitions IMO. It shows that in case of a deposit the bank has certain obligations to the depositor.
“Any other statement would simply have been factually WRONG and not based on the actual laws in Iceland at the time. As has been repeatedly explained before, the deposit guarantee for Icesave by the Icelandic government was only authorized, when it was passed into law by the Icelandic parliament in August 2009.”
So the icelandic government was running a little deception when its was telling potential depositors it was safe to put their money in an icesave?
I say that when a high level government official makes a promise in order to obtain financial benefit and at no point is that is that promise denied then that is a contract.
To Leo:
>>>>except that these people are not investors, they were people putting savings into a savingsaccount that was guaranteed by the Icelandic government.
The last part of your statement should have been correctly stated:
“that was guaranteed by the Icelandic deposit insurance fund (TIF)”
Any other statement would simply have been factually WRONG and not based on the actual laws in Iceland at the time. As has been repeatedly explained before, the deposit guarantee for Icesave by the Icelandic government was only authorized, when it was passed into law by the Icelandic parliament in August 2009.
Hello Fisy
You said
>”The question is, when does an interest bearing instrument ( whatever it is ) stop being viewed as simple demand deposit and because of its interest premium become an investment ?
I would say that is above around 5% per year because that is rate of growth averaged over time that you can get just by buying passively in the stock market.
But there is no doubt that this IceSave was deposits in a bank account. Unless you did take they longer term not instant access, yearly,etc bonds.”
Not quite sure what you are saying here Fisy… but you recognise IceSave was a guaranteed deposit savings account – not a ‘shares investment.’
At the time – before the Landsbanki collapse, the rate offered was not unique, as I said way back in Nov 2008.
https://www.icenews.is/index.php/2008/11/07/iceland-pm-hits-out-at-imf-rumours/#comment-34443
You say
>”Here we see moral hazard created by deposit insurance and application of freedom of establishment pillar of EU regulatiosn to banks. Never should this pillar have been applied to bank branches.”
Perhaps more of a legal hazard than Moral?
You say
>” If you read boards of investment money forums etc at time this was the main thing was used as reason to put money in. The deposit insurance.
Without it IceSave and other foreign banks would have made little traction into UK market which is the market that did cause all the trouble and ongoing bad feelings between governments.”
Wouldn’t disagree with that Fisy, Hurrah! But that doesn’t make me inclined to accept ‘Plan ‘A’ 2024 etc.
So I would fully agree with Mike (UK Nordic analyst). When he says –
>“To tell you the truth if I were the British or Dutch governments I would just turn around and say “Fine! We offered you a deal to repay us in a considerate, clear, organised, and low-interest way. You don’t want that. OK, we’ll have our, _OUR_ money, back NOW – since that’s how deposit gurantee schemes work, INSTANTLY – and to pay us back you can go and ask the capital markets or your friends.” You won’t be offered a grace period and the interest rate will be in the region of 8-12%. As for your friends, besides the Faroes, none of the other Nordics are prepared to go near you – they have issues with you still (assets being pledged to back up loans – and then the assets being sold!).
https://www.icenews.is/index.php/2010/01/07/the-emergence-of-icesave-empathy-for-iceland-in-uk-media/#comment-109262
Hmm, Paxman is a bit of a fool here. Yes he is playing the hardball journalist, but he is asking the wrong questions and he is impolite without any reason to be impolite. The Icelandic president did ramble on quite a bit, but Paxman could have been more polite.
And its clear Paxman is deadet on a predetermined path of questioning. So when the Icelandic president answers take the whole debate into a different direction, a more procedural one, Paxman fails to follow and it kills the interview really. I think Paxman could have asked followup questions on the consequences of the referendum if it leads to a no.
Matt
Also read this – and others also who think IceSavers were ‘greedy investors’.
http://blog.moneysavingexpert.com/2008/04/01/icesave-how-safe-are-your-savings-facts-and-myths/
As to interview. This is Paxman.
He and his editors and presenters do have they very harsh style and hard questions because they mainly do deal with politiicans.
So no problem there. ( At least this is the real thing and not the other BBC cheap imitation Stephen Sackur on hardtalk. )
But it is classic poor journalist research — the introduction simply has errors of fact in it and Paul Mason and his team did a poor job all the way up to 3:45.
Bad fact checking. Of course they have an agenda but it is very poor. I hope that some one will take transscript and show actual facts.
They could not even get basics right that a law was passed in August with the state gaurante. It is a very poor misrepresenation.
As to interview, I enjoyed it.
Typical classic Paxman.
And Ólafur did hold up well. Not as well as Geir on Hardtalk but well.
https://www.icenews.is/index.php/2009/02/13/former-icelandic-pm-haarde-on-hardtalk/
At least it was live so that they could not edit it selectively. Which newsnight and all the other main stream media programs do to support they editorial biases.
5:55 Paxman : “The lesson that many people are drawing from all of this is quite simple. Don’t trust an Icelander.”
With inaccurate yellow journalism like the start intro of this interview and from sources such as the Sky News and Times who can be blamed.
But people dont just get they news and opinions from this sources any more.
Overall it was a good interview. Too much talking about democratic processses from Ólafur Ragnar but he got the facts out.
>comparing bank account with an investment
The question is, when does an interest bearing instrument ( whatever it is ) stop being viewed as simple demand deposit and because of its interest premium become an investment ?
I would say that is above around 5% per year because that is rate of growth averaged over time that you can get just by buying passively in the stock market.
As mike would say, dust of you copy of Triumph of Optimists: 101 Years of Global Investment Returns; E Dimson, P Marsh and M Staunton.
But there is no doubt that this IceSave was deposits in a bank account. Unless you did take they longer term not instant access, yearly,etc bonds.
Here we see moral hazard created by deposit insurance and application of freedom of establishment pillar of EU regulatiosn to banks. Never should this pillar have been applied to bank branches.
And we dont know what EU burecrats was responsible for this poor work as there is no accountability in EU burecracy. It is designed that way.
Without false sense of security of Directive 94/19/EC IceSave would never have become big as it did because UK investor would have been very much more careful in doing they DD.
If you read boards of investment money forums etc at time this was the main thing was used as reason to put money in.
The deposit insurance.
Without it IceSave and other foreign banks would have made little traction into UK market which is the market that did cause all the trouble and ongoing bad feelings between governments.
One way to save money in Iceland is to reduce the number of politicians and the salary of politicians. They are very highly paid considering Iceland is a country of 300,000 people.
Peter said
>I’m getting of sick idiotic posts like this comparing bank account with an investment
Me too Peter – I’ve been repeatedly raising this misconception since Nov 2008
https://www.icenews.is/index.php/2008/11/07/iceland-awaits-imf-decision-on-monday/#comment-34618
Matt – read and understand!
To help understand what’s going on here, Matt, and why you are so thoroughly incorrect, it’s useful to have a bit of history and context. It’s important to remember that the whole damn financial system is based upon trust, and the absolute foundation of that system are deposit-taking banks. It’s in society’s interest as a whole to have confidence in the deposit banking system — otherwise you end up with people…well, not trusting the banks, and instead keeping their savings under a mattress. That’s not good for anybody, and it doesn’t matter whether you sit on the right or left of the political spectrum to see that (as a total lefty, I think it’s ridiculous that some people are tying this whole dispute into some sort of anti-globalization, anti-neoliberal movement).
In the Great Depression, banks closed and since deposits weren’t really guaranteed by the state people freaked out and tried to get their money back from the banks, which caused more banks to collapse (the classic “bank run”). The world was supposed to have learned from that period that it was in everyone’s interest to make sure that never happened again, and deposit guarantees are a primary method of making sure that it doesn’t: even if a bank is sickly, you always know that a certain amount is guaranteed, so there’s not as much incentive to participate in a run.
People talk about managing risk in the Icesave context. There was an insurance scheme in place (up to around 20k euro), so if you doubted the soundness of the banks, the appropriate way to manage risk would have been to not deposit more than the deposit guarantee. That’s what people do. The Icelandic government repeatedly assured people their guarantee was good — it was a prerequisite for even operating in places like the UK or Holland.
In Canada, for example (where I’m from) federally chartered bank accounts are protected to the tune of around $100k. I think in the US it’s $150k. Iceland guaranteed its own citizens 100%. What really matters, though, is that the deposit insurance scheme has NOTHING TO DO with “investments” or the sorts of private-sector bailouts we’ve all seen over the last year or two. I repeat: they are COMPLETELY DIFFERENT. The function and rationales are two wildly different beasts. It’s really, really important to understand that before speaking to Icesave.
[…] More: BBC Newsnight interview with the Icelandic president | IceNews … […]
Easy said:
“This guy is an idiot, (the host not the president) terrible host for such an interview, totally on one side, and with an agenda.”
—————————————————
Jeremy Poxman? no he is far from being an idiot. Most every one of his interviews are conducted like that, aggressive, pompous, condescending and playing the devils advocate. Check out on You Tube that Paxman did with George Galloway when he got elected to parliament in a London constituency, a battle of like minds.
Despite the many errors in the tabloidesque introduction, the derogative slant of Paxman, the President came out alright, kept his focus on what he wanted to say, said it as simply and as clear as possible and even managed to talk over Paxman.
And to add, how is it a democratic right to refuse to pay a debt.
Imagine that Congress in the US decided this. Ok, we agreed to build up a 10 trillion USD debt. However, the people of the US never explicitly agreed to actually paying off the debt, so now we’re gonna put it to a democratic vote whether or not we’re actually gonna pay.
The people of Iceland already implicitly agreed to the payment of this debt. They probably didn’t realize this, but when they agreed to the deposit guarantee scheme, and the risky bank system, they also implicitly agreed to the resulting financial obligations. Its absurd to think that you can agree to the one without also implicitly agreeing to the other.
@Matt
except that these people are not investors, they were people putting savings into a savingsaccount that was guaranteed by the Icelandic government. Furthermore, one of the main reasons those savingaccounts were even available in the UK and the Netherlands was the fact that Iceland has such an deposit guarantee scheme.
And to add insult to injury, the Icelandic government accepted that it indeed was liable under the deposit guarantee scheme, because they reimbursed Icelanders with deposits in these banks. But because they only had limited money, they just screwed the foreigners out of their guarantee and refuse to pay them.
Here we go again, Matt writes
“there is no such thing as a risk free investment”
Absolutely correct Matt, the only problem is that Icesave accounts weren’t “investments” they were “deposits” (read various postings here or access any law on the establishment of deposit-taking institutions). Deposits are usually guaranteed to some level by governments, investments are not. Iceland was no exception (the relevant law is provided in English for you on the government website). If anyone should have acted therefore to stop a systemic crash after concerns were raised (as early as March 2006 – read the Danske Bank report, or Merril Lynch’s) it needed to be the regulating authorities – the Icelanders. The Brits and Dutch authorities had no power to stop the banks or even advise their own people to avoid Icelandic banks. If you know anything about Iceland then you’ll know that any statement made by the FSA in the period 2004-8 saying “Don’t bank with an Icelandic bank” would have brought down a storm of abuse along the lines of “How dare you bully our small nation!”
“As investor, it is your responsiblity to ensure your finances are safe, and as much risk as possible is removed.”
I’m getting of sick idiotic posts like this comparing bank account with an investment. A bank accounts is used to hold money and its guaranteed up to a certain level, as mandated by the EU. It is not an investment. The issue here is that Iceland has been unable to back up its guarantee and has instead dumped the bill onto UK and Dutch taxpayers, at the same time guaranteeing only its own domestic depositors.
This guy is an idiot, (the host not the president) terrible host for such an interview, totally on one side, and with an agenda.
Chek this articles so you can see that its not all black like the Goberment with the helping hand of the media is traying to make us belive:
http://www.independent.co.uk/opinion/leading-articles/leading-article-iceland-should-not-be-bullied-1859930.html
And the Ft, is saying the same and the guardian.
As an outsider to this issue, I have kept a close eye on both sides of the story, as well as utilized multiple news sources to obtain information. I felt as if Bill O’Riley (http://www.youtube.com/watch?v=O_HyZ5aW76c) was hosting this interview and I would be embrassed to be the host, especially in the near future when the details of a democratice system are clearly understood by this media bufoon Frankly, if you understand politics and are pro-democracy, the process Iceland is undertaking is ideal. Further, if you have an understanding of market capitalism and privatised banking systems, you know there is no such thing as a risk free investment. Clearly, there are underlying funtamental issues that led to the collapse of a banking system that stem from an international financial system that had little to no oversight. Further, in spring of 2008 the Financial Times and Wall Street Journal warned of the collapse of the banking system in Iceland. As investor, it is your responsiblity to ensure your finances are safe, and as much risk as possible is removed.
President Olafur Grimsson is a hero! If only we in the UK had politicians with such integrity.
Gordon Brown’s threat to veto Iceland’s entry into the EUSSR should be welcomed by Iceland.
Good luck to you all.
There are some strange facts in the indroduction.