Bjorgolfur Thor Bjorgolfsson, a major shareholder of Landsbanki, said this week that deposits with the collapsed savings brand Icesave could have been guaranteed by the UK if the Icelandic Central Bank had agreed to back a British transfer plan with a multi-million pound guarantee.
In the interview, which was broadcast on the Icelandic news programme Kompas on Monday night, Bjorgolfsson revealed that the day before Landsbanki was nationalised in Iceland, the UK Financial Supervisory Authority had offered to accept Icesave deposits under a British guarantee within 5 days, provided Landsbanki submitted GBP 200 million in collateral from the Icelandic Central Bank.
Bjorgolfsson suggested that the Central Bank’s refusal to grant Landsbanki the loan, which would have allowed them to accept the British offer, might have been the trigger behind the seizure of Icelandic bank assets in the UK which many believe led to the total collapse of the Icelandic banking system.
According to Bjorgolfsson, the Icelandic government therefore bears considerable responsibility for the collapse of Icesave and for plunging the country into an international dispute.
“Icesave could have been tackled very differently, “said Bjorgolfsson. “The Icesave issue would not be a problem, but part of a solution to the crisis that has now hit Iceland. And by that I mean that in a crisis like this, the responses to the problems are actually more important and have greater consequences than the problem itself”.
In Bjorgolfsson’s opinion the Icelandic Central Bank could have prevented the uncertainty surrounding the Icesave deposits in the UK and the subsequent clash between Iceland and Britain which caused considerable damage to Iceland’s reputation in the UK.
The Icelandic Prime Minister Geir Haarde and Minister of Industry Ossur Skarphedinsson have both denied knowledge of the British offer. The Central Bank has responded by saying, “the reason for Landsbanki’s request [for a GBP 200 million loan] was outflow from deposit accounts. An express treatment by the British Financial Supervisory Authority was never mentioned.”
Bjorgolfsson has rejected these claims, saying that “the directors of the Central Bank had full knowledge of the British Financial Supervisory Authority’s offer to fast track the loan and that can also be confirmed by others. Government ministers who have been solving the problems of Icelandic financial companies were also aware of the offer made by the British authorities.”
Sources: Morgunbladid, Iceland Review, Frettabladid, Kompas
Kær orchafine,
I am not getting there, i am there and proud of it. I have been here all my adult life, since the days there was no TV on thursdays. so i should be there :)
as i said before my heart is Icelandic.
Kveðja,
A.Þ.B
Mark,
You appear to have a very little grasp of the economic mess facing the world.
The problems that brought the economy of Iceland down are the same as everywhere else. The serious defect particular to Iceland was the nature of Banks being allowed to operate abroad willy nilly with the resources of a small nation used as a guarantee.
What is not similar is the extent of the damage so far.
Taxpayers money is propping up the Banking system in GB to save them from collapsing in the same way as Iceland banks
Icelanders have to take responsibility for their mess, understanding what brought them there, how to survive it and build for the future. If improved education is a part of that then fine.
Why didn’t the finer Universities in GB for example produce an educated group to guide their people in the finer intricacies of Economic prudence. Economists all over the World preached the doctrine of deregulation and easy access to credit. Greed for consumerism gripped world wide.
What Su has indulged in is selecting Icelanders as if they were more educationally defective than what the supposedly excellant teaching institutions elsewhere produce.
That is precisely my objection to Su’s diatribe.
Not to mention the ridiculous comments about the Hospitals,
Absolutly farcical for one who has witnessed the horrors of NHS in GB and Ireland.
I have come through one of those Universities in one of the top 50 and I can assure you the economic dept there were rampant deregulators and I can assure you that their educated population followed their lead.
Iceland, an Island nation being insular in Education maybe is an issue but the evidence is that it is a world wide problem and that my friend both you and Su fail to grasp.
.
My dear AÞB,
My family is half Icelandic, I watch Icelandic news and I travel very other time to Reykjavik. Unfortunately for the ones innocents who decided to stay or couldn’t leave, know the truths little by little. The villains are getting caught…
Maybe because I knew few individuals very influential in the top of Icelandic society and definitely because Icelanders aren’t aware of every thing going on in there political society and in the world I allowed my self to bring another point of view.
I really believe greediness end up Icelanders and others in their own perdition. Not talking about people who didn’t had nothing to do with this spiral of depths!
I can assure you, your point of view and reaction is almost the same as an Icelander. Keep up, you are getting there ;-) Ykkur vel!
good job you moved out of iceland then.
me money? your kidding. i have never had money. im just the normal everyday person out in the countryside who hasnt benefitted from any ‘boom years’ so i get annoyed at people saying things like
‘I know for a fact, very little information goes through to Icelanders about their own economy, situation and place in the world.
you recently moved out of Iceland. so you dont really know what is going on in Iceland with the people since the banks collapsed. i know what i read here on icenews and in english press isnt how it is in Iceland.
thats just what i see. im not political im just a single mother trying to keep a roof over my kids heads. oh and getting annoyed at alot of the stupid remarks by british people on this site against Icelanders.
My friend AÞB
Why do you assume things? Why do you think you are so special?
I am an expat, recently moved out of Iceland.
Thanks to defending Icelanders against people like me ;-)
Do you have some money to lend me?
Hi everyone. I don’t normally contribute to blogs such as this but since you’re (almost) talking about me, how could I resist? I was the Dean of the IT faculty at the University of Akureyi up to 2006. Came here in 2001 and I’m leaving in 2009.
Su – You obviously know Iceland very well. Everything you say is spot on.
Knowless – If you want to discuss the world economy go somewhere else, this site is dedicated to Iceland et al. This country has a unique set of circumstances and is the only country actually to become totally bankrupt. Largely self-inflicted. Icelanders need to understand where and why it went wrong. Su – far from rambling, being self-righteous or preachy – has talked specifics and she has it right. She promotes international education, third-world universities, the value of learning from abroad and highlights the virtues of a Chinese lecturer, a Russian professor and a Canadian dosent and you call her xenophobic. That isn’t my understanding of the word.
Here’s some generalisations for you. Icelanders – great people, I love the energy, creativity and enthusiasm of the young people here. They can appear a little cold on first contact but deep down there is a real warmth. But while everyone loves their own country and their own way of doing things, the trick is to love other countries and other ways of doing things as well. That way you learn, adapt and adopt.
Su >”That is the inward-looking problem for Icelandic higher education. The system refuses to recognise any form of excellence from outside Iceland, while internally it promotes low-grade people merely because they’re Icelandic.
The losers in the short run are the Icelandic students, in the medium term it is Icelandic industry and commerce and in the long run Iceland itself suffers”.>
———————————————————–
What are you rambling on about?
The world economy is in tatters, have you not heard?
Banks are choking all over the place.
Your self righteous rants have no relevance, sounds like preachy xenophobia mixed with condescension.
orchafine, you know nothing about Iceland other then what you read in the press. Doesnt it make you wonder why so many British here who live in iceland are defending Icelanders against people like you? and our own country. you have no idea!
Because we know what is going on in iceland, how Icelanders are.
I may be British but my heart is Icelandic.
# Axel
Like I thought a lot of your comments shows ignorance over Icelandic knowledge. Not only me point it out, but others commenter too.
It’s normal you love your country, but please stop believing in fairies and saying whatever you believe to people actually reading you and interested in Iceland.
I know for a fact, very little information goes through to Icelanders about their own economy, situation and place in the world.
It is time to realize for the future generations and your mental health, like many foreigners do, is that Iceland lives in there own world.
That will avoid so many problems, like the crisis you going through right now.
And please your hate about foreigners is unfounded and ungrateful. It just shows, once more, your ignorance!
Don’t be dismissive of third-world universities – many of them are excellent. The academic world is an international world and the standards of scholarship, teaching and research are measured against global competitors. I can name half a dozen third-world (a term with rather derogatory conotations it has to be said)universities which outstrip any insitution in Iceland. This dismissive attitude is a reflection of the racism that is prevalent – and largely unchallenged – in the Icelandic universities. Let me give some examples from the University of Akureyri, which is in the north of Iceland. This university has just sacked half a dozen full-time permanent academic staff. Surprise, surprise they are all útlendingar. They have PhDs, MBAs, excellent publication records and have delivered the highest grade teaching the university has ever seen. Meanwhile very low grade Icelandic staff, with no PhDs, pitiful research and no pedagogic skills keep their jobs.
Look at this guy. Go to
http://www.unak.is/?d=3&m=page&f=viewPage&id=89
and search for Bragi. Click on his name when it comes up.
He’s a FULL professor!!! Look at his publication list (ritaskrá). He has never published a journal article in his life, he has never supervised a PhD student, he has never won a major international grant etc. He wouldn’t even get a job as a junior lecturer anywhere else in the world – and I include third-world universities in that!
Go back to the search page and look for Tang. This is one of the people sacked. Look at his publications. He is a lowly lektor but his accomplishments put Bragi to shame. He is an excellent academic – a real prospect for the future. Go back to the search page again and look for Nikolai. Look at his publications. He got the sack as well. Finally search for Tony. Same again – he got the sack.
So why did they get the sack and Bragi got promoted? Just look at the names and pictures of the guys and I’m sure you’ll be able to work it out.
The published reason was that the computer science degree had too few applicants. Well in 2005, when recruitment was in the hands of these útlendigar, that degree had 200 applicants. These guys were competent and knowledgeable recruiters – they knew the market. In that year it was taken out of their hands and taken over by the senior (Icelandic) academic managers. They made no effort and deliberately let the degree die (there was just one advert last year for the degree). Why did they do that? Well, look at the pictures again and try and guess!
That is the inward-looking problem for Icelandic higher education. The system refuses to recognise any form of excellence from outside Iceland, while internally it promotes low-grade people merely because they’re Icelandic.
The losers in the short run are the Icelandic students, in the medium term it is Icelandic industry and commerce and in the long run Iceland itself suffers.
Peter
“Its going to take 20 years for Iceland to pull itself up to a reasonable state of existence”
you may be right, this video shows me worrying about it, http://www.youtube.com/watch?v=XXLOU17kTlc&feature=related
we will solve the money issue somehow
Su
i agree about MR and MA, and read the rest of your post with interest until i got to the point where you start talking about the third world,
we need to make changes, but not by handing Iceland over to foreigners, we need to hire all the smartest people in the world to fix our problems and use the knowledge to train our people,
im sure thats exactly what is going to happen.
Su “The economic and financial life of Iceland is now in the hands of skilled and experienced foreigners.”
I’d hope that they are not the same geniuses who are responsible for inspiring the economic mess around almost every European country.
Su “Part of the problem with Iceland is that many people (even those educated overseas) think they are better educated than they actually are”
AFAICS the University here is average, some depts better than others. But strange that Icelandic students manage to do quite okay when they go to finish their studies abroad. I cant speak for general teaching standards in Grunnskoli, the schools look nice, dedicated teachers and very good arrangements for special teaching
Su”I could also give you chapter and verse on the health system, but in summary: over-resourced, under-skilled”
Over resourced in comparison to what?
Hospital/clinic standards here are streets ahead of the UK NHS and Ireland. In fact the Hospital & Clinic standard is shockingly poor in Ireland, the home of the Celtic Tiger.
Axel,
I’ve been involved with the Icelandic education and health system for the past six years – “up close” so to speak. It isn’t how you think.
Leikskoli – brilliant, first class
Grunnskoli – average, good at teaching social skills
Framhaldskoli – truly awful. At places like MR and MA and similar schools the teaching is supposed to be preparation for university. It is very poor. The nominal time to complete the studentsprof is 4 years but the average time to complete is five. But the volume of work covered is less than the two-year A2 exams in the UK. The maths and sciences in Iceland are particularly bad (look at STAE103-603 at any school).
Universities – the worst of the lot. I’m not surprised its free (actually it isn’t) it would be an insult to pay for this sort of education. Academic staff are generally ignorant of modern pedagogic practice, the academic managers have no clue about designing an academic configuration or anything else related to their work. I’ve seen Icelandic academics walk into a lecture room and read a book to the class for 40 minutes. And they think there is nothing wrong with this. Exams and assessments are not validated etc etc. Look at any of the international league tables of higher education. The University of Iceland – supposedly the ultimate Icelandic institution – doesn’t feature in any of them. In the most well-known table (with a list of 500 universities) some third-world universities score highly but HI is nowhere to be seen. Get it Axel – third-world universities are better than HI.
Part of the problem with Iceland is that many people (even those educated overseas) think they are better educated than they actually are. It leads to all sorts of blindspots.
The economic and financial life of Iceland is now in the hands of skilled and experienced foreigners. There is a real case to do the same with the universities – Iceland just doesn’t have the depth of academic managerial talent to run a university – but nationalistic pride blocks such a move. Look at the rektor of HR. She has no experience of academic management. She has never run her own research group, she doesn’t know how to design a lecture, never mind a complete module etc. She does not know how to develop high grade education nor how to promote international quality research. In short – she is completely unqualified for the job. Rather similar to Iceland’s bankers and political leaders!
I could also give you chapter and verse on the health system, but in summary: over-resourced, under-skilled.
“i expect it may take us 3 more years to repair the damage, after that we will be stronger than ever
new gowernment, new rules in the finacial sector”
New rules which will make the Icelandic banking sector unable to operate outside Iceland. Do you honestly think a nation that defaulted on $60billion is going to be allowed to operate banks in the EU or elsewhere?
>before that we were a very rich nation with the best helthcare system in the world(free for all)
Argentina was one of the richest countries in the world at one time – now its a basket case.
Its going to take 20 years for Iceland to pull itself up to a reasonable state of existence. As for being ‘rich’, it will require the discovery of easily accessible oil and even that is 10 years away.
Education
http://www.cbsnews.com/stories/2002/11/26/world/main530872.shtml
http://en.wikipedia.org/wiki/Free_education
Health
http://www.who.int/whr/2000/media_centre/press_release/en/index.html
http://www.oecdobserver.org/news/fullstory.php/aid/356/Sant_E9_to_the_French_health_system_.html
thanks for posting this link orchafine
“The Icelandic nation doesn’t need a fire sale of good assets for the time being,” says Mr Jóhannesson. “Trying to sell retail assets at this time five minutes to Christmas is like trying to sell a Christmas tree in July, it’s impossible.”
so very true, our assets vill cover debts, like i have said before, people here have been shellshocked now for a few weeks but we are back on our feet now,
all 3 banks were sold from the state 7-8 years ago
before that we were a very rich nation with the best helthcare system in the world(free for all)
best education system in the world(also free)
far ahead of anyone else in conservating fishing stocks and using “green energy”
this explosion growth in the banksector took place in the 3 years or so
i expect it may take us 3 more years to repair the damage, after that we will be stronger than ever
new gowernment, new rules in the finacial sector
im actualy starting to look forward to this
i think the German word for what often takes place in the threads here is “schadenfreude”
we dont have a word for this here in Iceland
From the Financial Times, the next Icelandic “Saver”:
http://www.ft.com/cms/s/0/82477820-a785-11dd-865e-000077b07658.html
This is not for people who think it’s to complicate for others…
Blimey, you can taste the testosterone here. Ego and self importance started this mess, maybe we shouldn’t add to it here. Go for a walk in the fresh air instead.
I ‘lost’ £35k in Icesave. Hoping it’s back before the food in the fridge runs out.
You will be suprised on what will be revealed….hence the “friends” comment.
Unfortunately for us my dear Terry, it seems that we are the ignorant ones and even if some lost a life saving in Icelandic banks, “Iceland will raise after 2 years stronger than ever…!”
“nobody is stopping you and no one will ask you to stay, at the moment you are surplus anyway”.
GreatDane, isn’t this racism? I guess its ok. A first wave of 2000 Icelanders naturalized or not, is moving away pretty soon.
GreatDane
says-
“How dare you even think of how I will take this news, you are not worthy of such thoughts”.
Still defiance and lack of contrition – you do not undrestand the meaning of ‘worthy’.
Axel
says-
“since they raised inerests to 18% hundreds of people have lost their jobs,
this article is a piece of a large and complicated puzzle, and sadly im afraid, to complicated for some of you.”
Well hundreds of people have lost their jobs…………
300,000 people in th UK lost their savings. Sadly – that’s not complicated.
since they raised inerests to 18% hundreds of people have lost their jobs,
this article is a piece of a large and complicated puzzle, and sadly im afraid, to complicated for some of you.
This was on the news here few days ago
im not sure who to believe, if this is true the central bank decided to refuse this,everyone here knows that David Oddson hates Bjorgolf Thor and his father because of other issues in the past,
if Ossur Skarphedinsson says he has not heard of this i believe him, he is a honest man,
there are many misterys in his whole thing
this story adds to that mistery,
we know that our central bank and our government have made many mistakes, its hard not to notice
for example interestrates from 15,5 to 12% then change them back to 18% thirteen days later
only a gang of absolute idiots would do that
why cut the rates to 12% when inflation is 15% ?
since they raised inerests to 18% hundreds of people have lost their jobs,
this article is a piece of a large and complicated puzzle, and sadly im afraid, to complicated for some of you.
The Icelandic people have been duped, lied, scammed and abandoned by their corrupt businessmen, banks and government. They have lived a fantasy life of false wealth based on corrupt credit practices due to the encouragement of the scamming banks and businessmen of their country with the blessing of the ignorant and inept government officials. Now, Icelandic people have to face the reality of life that monies owed and spent must be repaid. They have to rid of their arrogance and pride and come to a solution to save your beautiful country. The fantasy of being rich is over, time to face reality.
How dare you even think of how I will take this news, you are not worthy of such thoughts.
GreatDane – Fishy – Willie Watson etc.
Perhaps the best way to deal with this news – is to place your fingers in your ears & shout loudly -La-La-La. They say it blocks out the truth!
Although the “dirt” will slowly but surely come out about what really happened and what the options of choices were before this happened, nothing will ever change until the Icelandc people come down from the cloud they were in for so many years,thinking that they were invincible and there attitudes oozed that type of arogance.Come on Icelanders- it’s good to be proud of who you are-but humilty gets you alot more respect than ignorant arrogance.It takes a person with half a brain to realize that there was something not right with Iceland-look at all the development houses(elite house),the expensive Cars that people have, all the incators that something was not quite right in iceland is all around you-you dont produce much in your country – so where do think the money was coming from? i will tell you where from borrowing money from other countries (several more times than your countries GDP-WoW! how stupid)not just to satisfy your “proudly Icelandic” Bank’s greed but to feed your greed too.The bad decision made by your goverment and your banks is just an extension of “its “people. You can either down to earth easy or with a massive crash-dont let your ego’s get in the way.
LOL, so basically just as most foreign depositors had suspected. Icelandic government arsed this up good and proper. Come on then, lets hear from all those people that have been trying to defend Iceland. It’s pretty clear to me and others that Icelanders, at least on this forum, have been blinded by nationalism. Their excuses are getting thinner and thinner. Is Iceland still sure it wants to go to court?
Let’s hear from William Watson too, cue his anti Darling-Brown rant about how he collapsed the Icelandic banking system yadda yadda yadda.
Haarde and Co. should be dumped in the next outgoing tide and Icelanders need to splash some glacial water on their faces to wake themselves up from their stupor.
Thank you GreatDane
For God’s sake, Icelanders! WAKE UP!!!!
Throw them away, force them to commit political hara-kiri!
Save your nation! Save your children!
Stop shtouting that you are not terrorists, everybody knows you are not, but you are indeed governed by financial terrorists!
Now that the truth coems to the surface, take action!
Stop hiding behind your national pride, from East to West in europe, the man on the street laughs at you, saying that the “Vikings” got what they deserved.
Please, wake up, W-A-K-E U-P!!!
orchafine have you ever given thought that: When you keep calling other people racist, without any apparent reason, what does that in fact make yourself?
Think hard over this one!
Finnally bc123a, some one who backs up my point of view…
Keep up my friend, because I done to hear innocent Icelandics with all their pride and racism!
I join bc123a and Mike Smiths’ comments. Your Icelandic multi-millionaire guru has spoken out, dishing out the dirt the Icelandic central bank and government have caused. They tried to use UK authority as scapegoat and shifting the blame for managing badly their whole financial sectors, now everything is clear which I hope all the Icelanders realise the facts. In addition to that, there is absolutely nothing in the conversation between Darling and Mathiesen on 7 October suggested firmly and for sure that they would have honoured their legal obligation for Icesave depositors (all what is in it when asked if they pay back UK depositors: well we are working on it,or, at the moment there is no guarantee ,or, we have to solve our domestic issues first etc etc etc) What about us Icesavers? we also have families and need to live too and many of us Icesave accounts are our main income… have you forgotten that, this hurts too much to bear. Thanks to our UK government, bailing us out straightaway without hesitation, and showed the Icelandic authorities how things should work and how decisions should be taken.
I know the Icelnadic people are sophisticated and intellegent, but I am disappointed with some of them who had gathered signatures and demonstarted against the UK, blaming them for their economic disaster, it was a false economy after all. Wake up please and speak out with honesty as your millionair Bjorgolfsson has done, otherwise your good and decent reputation will never come back
In the transcript of the conversation between Mr Darling and Arni Mathiesen, the £200 million liquidity for Landsbanki is discussed; it is towards the end of the conversation.
Mr Darling says that (in the light of what he has already been told by Arni) that he supposes Landsbanki didn’t get the £200 million that had been promised. Arni replies that no, they didn’t get the liquidity.
So the transcript, leaked by Icelanders and first broadcast in the Icelandic media, in conjunction with what Bjorgolfur Thor Bjorgolfsson now says, indicates that the Icelandic government, contrary to what Geir Haarde and Ossur Skarphedinsson reportedly say, knew perfectly well what was on offer from the UK authorities. It simply isn’t credible that Arni knew about the UK offer re Landsbanki and Icesave and didn’t tell his colleagues in Government about it.
It’s a pity that the Icelandic people, who I have found from experience to be very honest, have been let down by incompetent politicians and reckless bankers unworthy of their trust. I really thought that our politicians were in a league of their own for dissimulation, but yours run ours pretty close.
Well, now what, my icelandic friends?
Will you finally kick the idiots who run your country out of the door, or you will still stubbornly refuse to acknowledge that it is everybody else’s fault?
I am sorry for you. You are still in denial, and this will cause significant problems for icelandic society, if you do not accept the facts as they are. No, krona is not worth 150/EUR. No, you export verry little, and import a lot. Yes, your standard of living for the past 8 years was fake, fuelled by foreign credit. Yes, high end designer stores and expensive cocktail bars on reykjavik streets are aberration, and if it would not be for your debt-fuelled orgy, they would never be there. The list is long, but I will stop there.