“The Dutch and the British government should look closer when blaming Iceland for the downfall of their banks,” said Eva Joly, high profile to Iceland’s chief investigator concerning the fall of the banks in an interview with The Times. The Icelandic financial crisis is comparable to Bernard Madoff’s Ponzi scheme in the US, she said. There regulators ignored a series of red flags and did not act. The same goes with regulators in Holland and the UK: there were alarms being flagged but local regulators did not act. The Icelandic central bank said back in 2007 that it was too small to back-up Banks like Kaupthing and Landsbanki.
The Financial Services Authority, which had an obligation to monitor the Icelandic banks operating in Britain, has to take a share of the blame and the same goes for regulators in the Netherlands, “they should have acted,” Joly said.
Read the whole interview here
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You are both right, but still missing the point of what Joly is trying to say.
The UK and NL did act – they shut the banks down and got condemned for doing so. Anything else they may have tried to do would have had the same effect and when the NL put restricts on Icesave the Icelandic authorities allowed them to break it.
Why didn’t the Icelandic government stop the banks, after all it was their economy and currency at risk, not the UK or NL.
Could it be that you are missing the point? I believe that Eva Joly was talking about regulators not taking action when there were clear warning signs, preventing the harm before it happened. On top of that I think that some 50 people have been brought in by the special prosecutor and questioned and now the Icelandic government is in coop with the English government and authorities in Luxemburg will be in that that cooperation soon, so people will start to see more action. It’s the calm before the storm.
It’s nothing like the aftermath of Bernard Madoff’s Ponzi scheme. The Americans arrested him, prosecuted him, and sentenced him. It’s a year on, yet the Icelanders have even charged a single person yet!