Talk:2008–2011 Icelandic financial crisis/Archive 1

From Wikipedia, the free encyclopedia
Jump to: navigation, search

£550 or £720 million?[edit]

This needs a citation. --Ævar Arnfjörð Bjarmason 17:27, 9 October 2008 (UTC)

Done. Maxí (talk) 18:37, 9 October 2008 (UTC)

Causes?[edit]

Nearly all the news articles discussing the situation mention the Icelandic banks being unable to refinance their debt as one of the leading causes of the crisis, with the unability to refinance being linked to the tanking Króna.

But someone reading this article would have almost no idea about the causes of the crisis, a lot of the effects are covered but that's only the half of it.

There are also supposedly a lot of other factors involved, e.g. foreign investors dropping Icelandic assets once the instability of the Icelandic economy became clear, these and other factors also need to be covered. --Ævar Arnfjörð Bjarmason 20:58, 9 October 2008 (UTC)

This article gives a fairly clear analysis. I would also like to find articles connected to the run on Icelandic banks after the government announced it would take over 75% of Glitnir but that might not have made international news. I also see there is no mention of the fact that the banks had huge assets -- from the article it appears that they only had debts, which is not true. Icemuon (talk) 15:13, 11 October 2008 (UTC)

I've added several links to UK newspaper articles spelling out the dire situation Iceland and its banks were in over the weekend of 4/5th October. —Preceding unsigned comment added by 79.74.112.136 (talk) 23:14, 16 October 2008 (UTC)

Ebay Auction[edit]

Is this really appropriate material? —Preceding unsigned comment added by 75.31.243.229 (talk) 19:59, 10 October 2008 (UTC)

Do a google and check for yourself. A hot news on reuters and yahoo and icenews...all have it. Completely relevant here. --gppande «talk» 20:32, 10 October 2008 (UTC)
Why was this removed again? --gppande «talk» 13:42, 11 October 2008 (UTC)
I don't know that this is really appropriate here either. I can see its relevance on the ebay page, but here it seems to trivialize a rather serious issue. --OneCyclone (talk) 15:28, 11 October 2008 (UTC)
Would you please stop adding this trivial joke? Haukur (talk) 16:05, 11 October 2008 (UTC)
I Do not understand - it is one of the most happening news on eBay - Each and every media giant in the world has this news - why can't WP have it??? All major current news articles do have sections like in culture in or in popular media - why can't it be held here....why do you guys delete this - first have a discussion atleast. --gppande «talk» 16:07, 11 October 2008 (UTC)
It's a trivial joke, it doesn't describe anything real and it doesn't belong here. Haukur (talk) 16:10, 11 October 2008 (UTC)
Agree, this is not relevant. eBay prank auctions are quite common. Indeed, the IceNews ref. pointed this out. This should not be reintroduced.--A bit iffy (talk) 16:42, 11 October 2008 (UTC)
All of the news giants have reported on it, I really don't understand why it's being kept out as trivial. Given the near universal interest in it, I think it's really very POV to exclude it based on triviality. Trivial according to who? Not according to dozens of sources. -- AvatarMN (talk) 19:20, 11 October 2008 (UTC)
The news media regularly reports on trivialities which are of no interest to an encyclopedia. Haukur (talk) 20:19, 11 October 2008 (UTC)
What is your implication? That encyclopedias are better than news media? P to the O to the V, homes. -- AvatarMN (talk) 04:06, 12 October 2008 (UTC)
Now that's kind of a silly rhetorical question. A news media outlet has overlapping, but not identical inclusion criteria from an encyclopedia. We are not obliged to "lighten up" our articles or attract readers in order to increase revenue. Pointing out that an encyclopedia is different from a newspaper is not arrogance. It's merely stating fact. __meco (talk) 10:25, 13 October 2008 (UTC)
Would it be fine to hear that a fact is carried by all media but WP knowingly turned a blind eye on it? Forget profits and traffic. Stay focused on fact. An event has occurred of significant proportion inviting large attention from global audience...but WP says we don't want to record it. Not the true WP spirit. --gppande «talk» 10:35, 13 October 2008 (UTC)

To all those who want this auction news to be removed:

  • Encyclopedia is called so when it carries all information on a particular subject. How can you expect somebody who wants to know all about Icelandic financial crisis to go to eBay page and check if there was an unusual auction related to it? It is not possible.
  • If the news was so trivial how will it be present on almost all websites of media giants? If it was trivial it would have been only on 1 or 2 media websites which can be called POV or baseless but almost every media giant reporting it NOT TRIVIAL.
  • This is not the first time that popular current news item is being added such a news which is present on popular websites like eBay. The Large hadron collide experiment had a separate section of YouTube videos. American election articles carry media cartoon news. Its always there. So why not here?

Try answering this first. If I do not receive answers then the news will once again go on the article. --gppande «talk» 11:08, 12 October 2008 (UTC)

Actually, even eBay think it is trivial and have removed it. Its not even in the eBay archive so pretty impossible to verify, even if we wanted it in the article. SpinningSpark 12:22, 12 October 2008 (UTC)
eBay do not think it's trivial, they think it's illegal and the seller has an illegitimate claim to being able to sell Iceland. I echo everything gppande says, and add that this encyclopedia in very large part bases notability/non-triviality on information being published by just one of the dozens of sources that have published the information in question here. We aren't supposed to go around judging something that dozens of our accepted sources deems worthwile as actually trivial. If we make a pillar of the practice of trusting and using their published material, how in the hell can we go saying that something that so many of them have given digital ink to isn't worthy of Wikipedia? This is really unbelievable. -- AvatarMN (talk) 20:01, 12 October 2008 (UTC)
As for the claim we can't verify that eBay had this auction becuase they've removed it, the aforementioned regularily trusted sources saying it did is more than adequate. We don't need to reference a digital copy of a book if it doesn't exist, we can reference a reliable source that says the book exists. -- AvatarMN (talk) 20:05, 12 October 2008 (UTC)
It has been quite sometime I have posted my argument to put up the eBay auction on the article. I still do not have any convincing answer why the news item cannot go into the article. But I am sure, as soon as I put it in the article it will be reverted without a discussion starting another edit war. --gppande «talk» 07:07, 13 October 2008 (UTC)
I have added the news now. Also added is a discuss tag. A thoughtful person will attempt discussion prior to start of edit war....but again it's just a hope! --gppande «talk» 07:20, 13 October 2008 (UTC)
I support keeping it in, for the reasons mentioned above but also because such a serious situation needs to have at least one good joke about it; such things record how people feel better than any statistical figures. It's like how the Brezhnev stagnation article makes quite prominent mention of a Russian anecdote from the era. Esn (talk) 08:19, 13 October 2008 (UTC)
You've already put it into EBay#Unusual_sale_items - isn't that enough? I would personally prefer not having it in any article. The media is full of silly stories which we don't repeat. Haukur (talk) 08:50, 13 October 2008 (UTC)
Read point 1 from my post above and answer it. How will a person make a guess that he has to go to eBay page from here? --gppande «talk» 09:12, 13 October 2008 (UTC)
As I said above I wouldn't want this at the eBay article either. Haukur (talk) 09:47, 13 October 2008 (UTC)
Just because you don't want is not an argument. --gppande «talk» 10:30, 13 October 2008 (UTC)
I was merely pointing out that there is no contradiction in my views. Haukur (talk) 10:31, 13 October 2008 (UTC)
YOU are once again starting the reverting before consensus. I had given ample time to argue but you seem not interested and instead continue to press undo button time and again. This sucks. --gppande «talk» 11:06, 13 October 2008 (UTC)

If you want a joke to put in, how about "Árni Mathiesen, graduate in fish pathology and Finance Minister of Iceland" – we still haven't managed to find anything from him to add to the article. Physchim62 (talk) 09:43, 13 October 2008 (UTC)

That's truely irrelevant so was not added :-)) But the eBay news is very relevant and WP does have popular website/culture item in most articles. --gppande «talk» 10:11, 13 October 2008 (UTC)
Well twenty years ago, a degree in fish pathology might actually have been a good qualification to be Icelandic finance minister! But on a more serious note, there's been some suggestion (beyond sniping) in the English-language press (see the two articles in "External links") that one of the causes of the crisis was that the politicians who were supposed to be overseeing Iceland's banks didn't have a sufficient grasp of the risks that were being taken. Physchim62 (talk) 10:37, 13 October 2008 (UTC)

Hello, I'm the guy who unfortunately started this subsection. In any case, I think GPPande has made some very good points; however, I still have to disagree with what is mentioned in the comment. Namely speaking, how the singer is not included and the bidders' questions. Those two additions read like sarcasm. panth0r (talk) 10:04, 13 October 2008 (UTC)

That's fine. My point is news needs a mention and also if there are more similar news in popular magazines or TV programs or newspaper. Don't omit facts which have occurred and are relevant. Wordings can be made to suit the needs. --gppande «talk» 10:11, 13 October 2008 (UTC)

I have changed the headline. When it only reads eBay readers are going to be disproportionately drawn to that item simply because it doesn't fit in. This is a digression from the subject of the article whether or not we tolerate its presence, but we shouldn't direct readers to it without indicating that this is an incidental sidebar story. __meco (talk) 10:41, 13 October 2008 (UTC)

Thanks --gppande «talk» 11:00, 13 October 2008 (UTC)

Can someone please remove this again? It's been inserted eleven times by the same editor. Haukur (talk) 13:43, 13 October 2008 (UTC)

Belgium too - hardy har har. [1] Haukur (talk) 13:58, 13 October 2008 (UTC)

  • Oppose including this section. Although it makes for an amusing 'funny news' segment, I don't think it is of lasting importance or historical value; it's a practical joke, played by one person, which has ended, and which has not had any verifiable effect on the Icelandic financial crisis. -FisherQueen (talk · contribs) 14:30, 13 October 2008 (UTC)

I've removed this section [again] even though it had a notice saying not to remove it and discuss things on the talk page instead, I think the users adding a trivial joke of the moment to what will become a historical discussion of a financial event have to achieve consensus before adding it, not the other way around. Just because a few transitory news media have covered it that doesn't mean it belongs in an encyclopedia article, Wikipedia is not The Sun. --Ævar Arnfjörð Bjarmason 15:21, 13 October 2008 (UTC)

I think that the discussion had here has the people for the item's inclusion actually using Wikipedia guidelines to make their arguements, and the side against is not. Consensus is not a vote, and The Sun is a regularily accepted source. I think we need to seek arbitration on this, if one side ignores the discuss tag. gppande, you've worked hardest for this, would you like to request arbitration? -- AvatarMN (talk) 18:25, 13 October 2008 (UTC)
I'm sorry that you didn't understand my appeal to the rules; I'd be happy to include the relevant links. Wikipedia is not the news. According to that guideline, news items only belong in encyclopedia articles if they have some lasting importance. I do not see any way that one individual's online prank, which has already been corrected, has any importance to the financial crisis in Iceland; it does not appear to have affected the crisis in any way. I think that there are many other strategies at the dispute resolution page that could be tried before seeking arbitration. -FisherQueen (talk · contribs) 18:31, 13 October 2008 (UTC)
Okay... finally a valid arguement against. That's a guideline and actually makes a case. The argument against has been lead by Icelanders who don't think it's funny, acting on emotion and not coming up with any guidelines to support them. Arguing triviality, which is ridiculous considering the number of sources. There's still some pretty good arguements for, though. Someone who hasn't yet discussed removing the discuss tag is very bad behavior and warrants some kind of action for dispute resolution. -- AvatarMN (talk) 19:04, 13 October 2008 (UTC)
May I offer this compromise? Let's leave it out for three months, then revisit it. If, three months from now, it still seems important, we can make a better case for it having lasting importance. If, three months from now, no one has written about it since it happened, we'll know that it turned out to be not all that important after all. -FisherQueen (talk · contribs) 19:07, 13 October 2008 (UTC)
The argument is still hot, though. I'm not sure that a strategy of leaving it alone is very likely to be agreed upon. And I for one am pretty loathe to let someone who deletes a discuss tag without ever having discussed get the last word for the time being. It looks like rewarding that behavior. -- AvatarMN (talk) 19:12, 13 October 2008 (UTC)
I think this is a pretty good candidate for WP:LAME if it continues. I also think my rightness is obvious. :) So I don't have any motivation to do much other than point out my right position on the talk page and trust consensus to recognize it. Maybe I'll come back in three months and see which version ended up on top. -FisherQueen (talk · contribs) 19:21, 13 October 2008 (UTC)

Well, we have a bunch of policies around when something is notable enough to merit an article of its own but we don't have so much material on when something is notable enough to be included in an article which already exists. Mostly it comes down to editorial judgment based on first principles. Basically, I don't think this is material which the person reading the article would hope or expect to find there or, at that, benefit from finding there. Just like I don't think that the 2007–2008 Belgian government formation needs a reference to the "selling Belgium on eBay" story even though that one was published in multiple places, including the Spiegel.[2] Nor do I think the "selling New Zealand on eBay" story[3] belongs in 2006 in New Zealand. That an item can be sourced is a necessary condition for inclusion in an article but it is not a sufficient condition. Haukur (talk) 21:07, 13 October 2008 (UTC)

I entirely agree. It was momentarily diverting. It is not worthy of inclusion. Kittybrewster 21:38, 13 October 2008 (UTC)
Mayby we need Countries sold on ebay? (Hypnosadist) 21:55, 13 October 2008 (UTC)
Agree entirely. To use a completely different example a photographer once was lucky enough to record a note Bush wrote asking Rice if he could go to the toilet in a UN summit [4]. Like this eBay auction, there were news stories of this throughout the world. It was even in the front page of the New Zealand Herald IIRC. However I would oppose any attempt to add this to the Bush article (and I don't like Bush) Nil Einne (talk) 12:58, 15 October 2008 (UTC)

Russians and money laundering[edit]

Is there any reference to the bailout that Russian offered? This Times article suggests it was offered because Russian companies have been using Iceland's lax banking system to launder money - which is why they want stabilise it. Is there any truth in that? Malick78 (talk) 06:30, 11 October 2008 (UTC)

The article doesn't necessarily suggest that - it may be suggesting that the Russians would like to use the banks in such a way in the future. But it's vaguely worded, perhaps intentionally so. I've never heard this suggested before, my guess is that the author is just offering unfounded speculation. Haukur (talk) 11:41, 11 October 2008 (UTC)
Actually, the loan may itself be a laundering operation. Wire 4B in, wire 3B out, enjoy the sunshine. The amount is too small compared to Iceland's financial hole, what good can it make? NVO (talk) 18:50, 11 October 2008 (UTC)
All the same, €4bn is about what Iceland spent on imports in 2007 (395bn krónur), and more than the foreign reserves of the Central Bank of Iceland (374bn krónur)! Physchim62 (talk) 20:18, 11 October 2008 (UTC)
The loan (if it goes through) is intended to shore up the currency reserves. Nothing else. Haukur (talk) 20:31, 11 October 2008 (UTC)

Hmm, it seems that Russophobia runs VERY deeply in holier-than-thou Western Europe... Perhaps you're suggesting that they should flog Iceland while it's suffering, as Britain is wont to do? —Preceding unsigned comment added by 190.220.51.185 (talk) 01:47, 14 October 2008 (UTC)

It's an Icelandic crisis[edit]

Can we try to shift the focus somewhat to the effects in Iceland? Very many people had their money in stock funds, money market funds or some of the other funds operated by the banks - the government won't compensate that. Very many people have lost their life savings and pension funds have been hard hit. Many people are losing their jobs. Many people took loans in a foreign currency to escape the very high interest rates in Iceland - now that the króna has plummeted those people are in severe trouble. From reading the article you could imagine that this crisis was all about British savers. Haukur (talk) 16:53, 11 October 2008 (UTC)

That would indeed improve it. Carry on. Kittybrewster 17:45, 11 October 2008 (UTC)
True! Two relavant articles: one on 500 Landsbanki employees losing their job [5] and another on newspaper 24 Stundir shut down with 20 jobs lost and dropping domenstics demand for Icelandair [6]. I do not have much time to edit the article itself, but I could point to some possibly useful links.--Michkalas (talk) 17:53, 11 October 2008 (UTC)
It's work in process. --Stefán Örvarr Sigmundsson (talk) 18:34, 11 October 2008 (UTC)
Kudos to those who have now worked on this! Haukur (talk) 20:31, 11 October 2008 (UTC)
I wrote the section on "Other effects within Iceland". However, I think there is still more to be said about further job losses, etc. Maxí (talk) 22:49, 11 October 2008 (UTC)

title problem[edit]

Google "2008 Icelandic financial crisis" and Wikipedia is the only one to use the term. We shouldn't make up a title name and use it as if others also use it. The 2008 Icelandic financial crisis is a crisis involving banks... is not good prose. We need to create a sentence that either uses the title or just don't use the title name in the first sentence. Spevw (talk) 23:35, 11 October 2008 (UTC)

The term "financial crisis" seems to be fairly widely used, and the other alternatives being used in the news media (eg, "financial meltdown") are hardly encyclopedic… Physchim62 (talk) 00:35, 12 October 2008 (UTC)
I have Googled the term, and many news articles and other sites appear which are using the terms "financial crisis" and "Iceland(ic)" in the title. The title of the article is also consistent with other related articles, for example 2008 Belgian financial crisis, 2008 Russian financial crisis, Financial crisis of 2007-2008, etc. Maxí (talk) 08:56, 12 October 2008 (UTC)

{{British-English}}[edit]

Is it appropriate to have this template on this article? This is not a particularly British topic, so it is not reasonable to suggest that a preponderance of editors editing this article are British-English users. Also, such a template would suggest that editors should use British-English when editing this article. Where's the precedent for a dictum of that sort? __meco (talk) 07:45, 12 October 2008 (UTC)

Yes, editors should use British English when editing, or accept that their edits will be changed to British English. The "dictum" is linked to from the template: Wikipedia:Manual of Style#National varieties of English. The template is fairly widely used: there has been one on Talk:Iceland for over nine months now! Physchim62 (talk) 09:38, 12 October 2008 (UTC)
Well, I would consider myself to be the first major contributor of this article, and I wrote in British English. It is Wikipedia convention that the style of the article should be consistent unless there are strong national ties to a particular variety of English, which there are not really in this case. However, the English-speaking country mentioned the most within the article is the UK, so I think it makes sense for the article and template to remain as is. Maxí (talk) 11:01, 12 October 2008 (UTC)

Comma versus period in numbers[edit]

I'm a bit confused by this here:

At the end of the second quarter 2008, Iceland's external debt was 9,553 billion Icelandic krónur, more than 80 percent of which was held by the banking sector: This value compares with Iceland's gross domestic product of 1,279 billion krónur (2007).

Should I read "9,553" as "9.553" or "9553"? That is, is the comma a thousands separator or a decimal separator? --Saforrest (talk) 18:59, 12 October 2008 (UTC)

It's clear from a close examination of the original documents (and by comparison with figures published elsewhere) that it's a thousands separator. I'd rather it wasn't there, there's no need for it in a four-figure number. Physchim62 (talk) 19:11, 12 October 2008 (UTC)


Censorship?[edit]

I included information on the Kaupthing collapse in the Isle of Man and the Channel Islands that was deleted immediately. Unless this is corrected I will need to take the issue up with Wikipedia editors. Best MacBiggles —Preceding unsigned comment added by MacBiggles (talkcontribs) 21:12, 12 October 2008 (UTC)

We are all Wikipedia editors, you are too. I'm sorry that I felt I had to remove your addition, my reasons are in the edit summary I left. Principally: 1) This doesn't belong in the lede in such detail, it should go in the 'effects outside of Iceland' section (the lede is meant to summarize the article) 2) You need to write in normal Wikipedia style (which is somewhat flat and dull) and from a neutral point of view, this means avoiding phrases like "spirited away" 3) It would be good to have a written source. Haukur (talk) 21:22, 12 October 2008 (UTC)

Even the Icelandic government doesn't deny it 'spirited away' the money! The prime minister, Geir Haarde justified the action by saying 'It's every country for itself'. —Preceding unsigned comment added by MacBiggles (talkcontribs) 21:28, 12 October 2008 (UTC)

  1. The information was not in the best place in the article.
  2. It misrepresented the statement by the Chief Minister, who didn't speak of money having been "spirited away"
  3. The Icelandic government does – and very strongly – deny that the foreign arms of the institutions were decapitalised before last Tuesday, and says that the reverse was the case, that money flowed out of Iceland to the foreign subsidiaries.
Physchim62 (talk) 21:37, 12 October 2008 (UTC)
Did the Prime Minister use the phrase "spirited away"? If he did, putting it in quotes and citing a source that he said those words might be appropriate. Otherwise, you're missing Haukur's point. -- AvatarMN (talk) 21:39, 12 October 2008 (UTC)
No, this is the press release. I've cleaned-up the paragraph a little, although I think it's still a bit much to say that the offshore investors were "especially" hard hit. Physchim62 (talk) 21:54, 12 October 2008 (UTC)
Thank you, you've done a good job. Haukur (talk) 22:09, 12 October 2008 (UTC)
MacBiggles: It is not true that the Icelandic PM said that 'it's every country for itself'; what he said is 'it seems it's every country for itself'. The difference is that he did not declare this as a policy of the Icelandic government, but rather this was his interpretation of the reactions of other countries when Iceland went to them for help. This was crystal clear from what the Haarde said. --140.180.14.7 (talk) 00:17, 25 October 2008 (UTC)

Job losses[edit]

Most recent reports are that 300 people will lose their job at Landsbankinn.[7] Similar losses are expected at the two other banks. Haukur (talk) 11:27, 13 October 2008 (UTC)

Done. Physchim62 (talk) 12:12, 13 October 2008 (UTC)

Foreign currency - some original research[edit]

To those who are curious: The króna is currently not really trading on the open market. What seems to have happened is that the central bank has essentially pegged it again to what it considers a reasonable exchange rate. But the second peg wasn't publicly announced and hasn't been reported as such. What they did publicly announce were guidelines for the commercial banks to follow in currency trading. Essentially, people wanting to buy a foreign currency are meant to prove that they are going abroad or that they are importing something useful. I haven't got a clear idea as to how the banks are actually enforcing this but foreign currency is certainly being rationed. Haukur (talk) 22:54, 13 October 2008 (UTC)

The Central Bank of Iceland is still quoting an official exchange rate, update every business day here. I saw a rumour somewhere (sorry, can't remember in which of the 70-odd references to the article) that foreign currency may be being "traded" for krónur between the banks, but not krónur outside of Iceland (for the reasons the article states). My latest addition (ref'ed to Bloomsberg) in the "Effects" section says that foreign currency is effectively being rationed for the moment within Iceland. Physchim62 (talk) 23:10, 13 October 2008 (UTC)
Yes, the Central Bank gives an official exchange rate as always. The difference is that the commercial banks now seem to slavishly follow it. Of course, all the big ones are now controlled by the state - this was not the case during the first attempt to fix the exchange rate. Just out of curiosity I checked my accounts in my bank this morning through the net and the rules they had were that you could turn foreign currencies into krónur to your heart's content but if you wanted to move the other direction the cap was 50.000 ISK (presumably per day). Just for the heck of it and to see if it really worked I bought Norwegian kroner for 10.000 ISK. I got to do this at an exchange rate corresponding to 131 ISK per euro. Haukur (talk) 23:25, 13 October 2008 (UTC)
Lucky you! I promise I won't tell the Seðlabanki! ;) Physchim62 (talk) 23:31, 13 October 2008 (UTC)

http://www.guardian.co.uk/business/feedarticle/7862251 —Preceding unsigned comment added by 121.210.48.24 (talk) 13:11, 14 October 2008 (UTC)

Surely, due to the inconvertible nature of the Krona and the varying exchange rate (100-450 per euro) the Krona asset values should be treated with some caution and a section place explaining the issues. The fall in the Krona must have had a significant effect on the debt situation of the Banks. —Preceding unsigned comment added by 79.73.9.43 (talk) 10:09, 21 October 2008 (UTC)

April 2008 report on the Icelandic banking crisis[edit]

Willem Buiter and Anne C. Silbert wrote a report comissioned by Landsbankinn titled The Icelandic banking crisis and what to do about it which has just been published online. According to mbl.is Buiter and Silbert shared their findings in Reykjavík on July 11, 2008 at a private meeting attended by economists from the Central Bank of Iceland and representitives from the Ministry of Finance, the private sector and the university community.

The report is very interesting indeed outlining in detail that Iceland is vulnerably to precisely the sort of situation that ended up causing the 2008 Icelandic financial crisis:

"Regardless of the quality of the banking sector’s assets, the Icelandic banks are vulnerable to a liquidity crisis. These banks are heavily dependent on wholesale financing, as well as on deposits."
"[...]"
"The Central Bank of Iceland, however, is unable to act as an effective lender of last resort to Icelandic banks if their creditors refuse to roll over their foreign-currency loans or if they refuse to extend additional foreign currency credit. The central bank does not hold enough foreign currency to do this and it is unable to issue more."

and:

"In its latest Financial Stability report, the Central Bank of Iceland says, “Critics have asserted that the Icelandic banks have grown too large. This might be true if a major financial crisis were imminent and the Icelandic Government were forced to resolve a critical situation affecting banking operations both in Iceland and abroad.” (May 2008, p. 7) Unfortunately, it is this inability of the government to control a financial crisis that is likely to cause one."

I haven't read the entire report but I would encourage fellow editors of this article to do so, its contents and date of publishing are very relevant to the current crisis. --Ævar Arnfjörð Bjarmason 01:00, 15 October 2008 (UTC)

From the conclusions of that report:
"Iceland has indeed become a highly leveraged financial institution with massive asset-liability mismatch – a ‘hedge fund’ in tabloid language."
The Central Bank of Icelad's Financial stability (sic) report cited above can be found here. Physchim62 (talk) 11:30, 15 October 2008 (UTC)

Effect on tourism?[edit]

Could someone add an explanation of how this crisis affects tourism? Does the weakening currency mean that we in the U.S. can fly to Iceland and stay/eat there for next to nothing in dollar terms? It would be nice from our point of view to be on the other end of that one for the first time in years... and hey, publicizing this might even help these folks out. Wnt (talk) 04:03, 15 October 2008 (UTC)

Yes, the net effect for foreign tourists in Iceland will be cheaper goods in Iceland due to a lower exchange rate of the Icelandic króna, this is something the tourist industry in Iceland will inevitably publicise in the coming months to do what you suggest. --Ævar Arnfjörð Bjarmason 14:53, 15 October 2008 (UTC)
And of course the current impact on Icelandic-British tourism caused by the "terrorism" bill being used to freeze assets.BBC:Iceland: Britain's unlikely new enemy Nanonic (talk) 22:30, 15 October 2008 (UTC)

The law used was an economic defence law, not only anti-terror. The current exchange rate quoted by the Icelandic central bank is for public consumption. Its 305-450 outside Iceland. You may want to check what your credit card supply will use before travelling. —Preceding unsigned comment added by 79.74.54.202 (talk) 16:35, 18 October 2008 (UTC)

It's not just for public consumption, it's for everyone doing business with the Central Bank of Iceland and the Icelandic banks. As far as I know the only trade in the króna for the past few days has been at 150 krónur to the euro. I'm not clear on what exchange rate the credit card companies are currently using, the media covered that closely for some time (it varied a lot) but I haven't seen any reports on that for a few days. Of course the CBoI is rationing FX, that's no secret, but while they are the only ones doing business in the króna at all it doesn't make any sense to say that another exchange rate is more real. I've got some 100 euros in the drawer - if you want to give me 45.000 ISK for that, I'd think that was quite a good deal for me. Haukur (talk) 17:10, 18 October 2008 (UTC)

Interest rate down[edit]

At long last, the Central Bank has reduced their interest rate from 15.5 percent to 12 percent.[8] Haukur (talk) 10:01, 15 October 2008 (UTC)

New Glitnir[edit]

Nýi Glitnir has been founded, 97 people will lose their jobs. It's pointed out that they had already let 250 people go this year so there was less for the state to cut.[9] Haukur (talk) 12:23, 15 October 2008 (UTC)

Inflation[edit]

Christensen's 75% inflation prediction is by far the highest one I've seen and should be qualified more in the article (and other opinions added, I'll see if I can find something suitable). Christensen has been über-bearish on Iceland for a long time. Of course a lot of that has been borne out by recent events but his word still isn't gospel.

In other news, Viðskiptablaðið reports that there are something like 100(!) agents from Vulture Capitalists currently in Reykjavík.[10] Haukur (talk) 13:09, 15 October 2008 (UTC)

If you can find another source, go ahead an add it. I was simply happy to find a named economist for the 10% GDP shrinkage (which seems excessive to me, but is not out of the range of possibility). Physchim62 (talk) 13:48, 15 October 2008 (UTC)
75% inflation works out – very roughly and assuming all other things are equal, which obviously they're not – as an exchange rate of 208 ISK to the euro. Not out of the realms of possibility, by any means. Physchim62 (talk) 13:59, 15 October 2008 (UTC)

The Euro exachange Bid/Ask spread has been quoted as 300/450 per Euro http://www.bloomberg.com/apps/news?pid=newsarchive&sid=azrp3E_O4HNE . 150 is unsustainable which is why there is no dealings whatsoever outside Iceland. The Big Mac price comparison came up with a figure of 158 per Euro for equivalence with the US dollar. But with the current situation, buying a Euro will cost 450 Krona. —Preceding unsigned comment added by 79.74.112.136 (talk) 23:31, 16 October 2008 (UTC)

Unemployment[edit]

Statistic Iceland have just released the third quarter unemployment figures based on the labour force survey[11]: 4,800 or 2.5 percent of the active population. Physchim62 (talk) 13:48, 15 October 2008 (UTC)

A little more comic relief[edit]

Found on the FME website here:

"The Icelandic financial market has been rapidly developing in recent years and further developments can be expected."

"Further developments" must seem something of an understatement after last week… Physchim62 (talk) 17:54, 15 October 2008 (UTC)

Nice find but I think it would be hard to top How to Succeed in Modern Business: Lessons from the Icelandic Voyage, a speech given by the president of Iceland in 2005. It ends with the words "You ain't seen nothing yet". File that under understatement too.[12] Haukur (talk) 10:25, 17 October 2008 (UTC)

British council losses[edit]

This BBC article lists all the Councils and other public bodies effected by this; http://news.bbc.co.uk/1/hi/uk_politics/7660741.stm (Hypnosadist) 20:01, 15 October 2008 (UTC)

"National bankruptcy"[edit]

Do we have to give such prominence to this sensationalistic reporting about "national bankruptcy"? What does it even mean? Is anyone seriously suggesting that the Icelandic state will become insolvent? If not, what is it supposed to mean? Haukur (talk) 21:58, 15 October 2008 (UTC)

Yes, people are suggesting just that. That is why i think my government (the british) played Hard ball so early (and i agree with them), icelanders owe around 300,000 euro's per person. If you sold every house and car in iceland you just might be able to cover that debt. (Hypnosadist) 22:19, 15 October 2008 (UTC)
You mean the debt of the banks? The Icelandic state has no obligation to pay that - the banks were privately owned enterprises. Haukur (talk) 22:24, 15 October 2008 (UTC)
No the Icelandic State which under-wrote the Banks in your name. (Hypnosadist) 01:43, 16 October 2008 (UTC)
It didn't. Savings are insured to a limited extent by Tryggingarsjóður, though. Haukur (talk) 09:49, 16 October 2008 (UTC)
The purpose of the central bank is to support the banks. The explicit statement that Iceland couldn't do this is the reason why Iceland doesn't have a international banking syste or viable currency. —Preceding unsigned comment added by 79.74.54.202 (talk) 16:45, 18 October 2008 (UTC)
Causality is a complicated thing but IF the Central Bank of Iceland could have backed up the commercial banks THEN they would, in all likelihood, still be operating. There are, of course, other alternative history scenarios in which they would still be operating. For example, if Glitnir and Landsbanki had made better business decisions they would still be operating, and wouldn't have brought Kaupþing down with them. Haukur (talk) 17:17, 18 October 2008 (UTC)
Yes it gave assurrences that it would back up the bank deposits, in writing to the Isle of Mann government. (Hypnosadist) 18:44, 16 October 2008 (UTC)
The Icelandic government wrote to the Isle of Man government on this? That's interesting, is the letter public or can you show me a source? Haukur (talk) 19:33, 16 October 2008 (UTC)
Don't you mean that Kaupthing guaranteed the IoM deposits with its subsidiary? That's all the IoM government was saying last week. Physchim62 (talk) 19:48, 16 October 2008 (UTC)

"We were faced with the real possibility that the national economy would be sucked into the global banking swell and end in national bankruptcy."

That wasn't some "sensationalistic" journalist, that was Geir Haarde on 6 October. In any case, the Icelandic state is bankrupt, in the sense that it doesn't have the money to pay its financial obligations. It won't stay that way, of course, it will be bailed out, but for the moment that's the situation. Physchim62 (talk) 22:48, 15 October 2008 (UTC)
Geir Haarde mentioned the possibility of national bankruptcy only to reject it. What financial obligations is the Icelandic state unable to meet? I'm not aware of any. Haukur (talk) 22:53, 15 October 2008 (UTC)
Icesave was set up as a branch of Landsbanki, not as a subsidiary, and so came under the Icelandic Depositors' and Investors' Guarantee Fund (Tryggingarsjóður). It could have operated as a subsidiary (as Kaupthing did), but presumably that was less interesting (perhaps tax reasons?) to its management. Are you suggesting that the Tryggingarsjóður, set up by Icelandic law, is not a part of the Icelandic state, or that it is currently in a position to pay out to overseas depositors? Physchim62 (talk) 23:03, 15 October 2008 (UTC)
Tryggingarsjóður is indeed supposed to pay out depositors but the Icelandic state is not legally responsible for it being able to do so. If it fails to pay out depositors the state is not required to make up the difference. Haukur (talk) 23:08, 15 October 2008 (UTC)
Separately, the Icelandic state has decided to go beyond what it is legally required to do and ensure that the Icesave savers will get what Tryggingarsjóður is supposed to pay them. They're doing this in order to maintain good relations with Britain and the Netherlands and because they believe the foreign assets of Landsbanki will be sufficient to cover the debt. Haukur (talk) 23:12, 15 October 2008 (UTC)
I don't think even the Icelandic government buys that one, or it wouldn't have taken a loan from the Dutch government to cover the claims against the Tryggingarsjóður in the Netherlands (€1.1 billion was a figure I saw quoted for the size of the loan). Until Iceland and the UK reach agreement on a similar (but much larger) loan to cover the British claims, which no doubt will happen pretty soon, the Icelandic state is technically bankrupt. After all, the existence of the deposit protection scheme was a prerequisite for Landsbanki to be able to do business in this way in the first place. Physchim62 (talk) 23:23, 15 October 2008 (UTC)
Well, this is what the only legal analysis I've seen published says and it's what the Minister of Commerce said at the press conference today. The deposit protection scheme was never intended to be able to cover the collapse of the entire system all at once. Haukur (talk) 23:29, 15 October 2008 (UTC)
The article in Morgunblaðið by Stefán Már Stefánsson (who is the go-to guy on EU/EEA law in Iceland) and some other guy makes the point that a) the deposit protection scheme is supposed to cover €20,000 or more if there is enough money in the fund to cover larger claims and b) if the fund doesn't have the money to cover even the first €20,000, the losses are supposed to be borne by the depositor. The fund is not supposed to be backed by the government and any government backing beyond what the fund can handle is simply just politics. The non-discrimination clause of the EEA agreement doesn't apply to such political arrangements. The Icelandic FME was supposed to enforce the law on the deposit protection scheme and they failed spectacularly in making sure that banks were actually paying to the fund what was required of them so perhaps the savers could demand some damages from there on that basis. The FME's UK and Dutch counterparts also have some responsibility here, they obviously approved of the Icelandic deposit protection scheme or Landsbanki wouldn't have been allowed to operate in those countries. Why is the Icelandic government acting as if it is obliged to compensate those depositors? I wouldn't rule out ignorance on the law but I guess it has something to do with not tarnishing Iceland's reputation further than has already happened. Also, they are pretty confident that Landsbanki has the assets to meet the deposit claims. With the emergency law passed by Althingi, depositors' claims were given priority over all other claims so the depositors will likely get all of theirs eventually. Landsbanki and its new owners, the government of Iceland, have three months to settle the matter so it's a bit premature to call anybody a thief. --Bjarki (talk) 22:01, 17 October 2008 (UTC)
When Björgvin was asked about this article in a press conference he said he didn't disagree with it but implied that the foreign governments would and that taking a hard line on this would lead to a protracted legal battle which would damage Iceland's ability to reintegrate into the international community. Also, clearly, his confidence that the Landsbanki assets and the depositor provision in the tapeworm would take care of the matter has to play a large role. Haukur (talk) 22:39, 17 October 2008 (UTC)
I have to disagree with the learned analysis, although I accept the point is complicated and has never been tested in (nor was it designed for) a case such as the current one. If the deposit protection scheme can't pay out, it is up to other deposit-takers to make up the difference, not the depositor. It is also up to the government to make sure they pay out. At the moment in Iceland, of course, the government is the largest deposit-taker. The only way to square the circle would be to find a foreign (or domestic) buyer for Kaupthing who would take on Kaupthing's share of Tryggingarsjóður's debt, which doesn't seem to have come about yet. Otherwise, it is up to the government to take it on, or at least to guarantee it in the short term as it appears that Landsbanki's foreign assets will eventually cover most if not all of the hole. Physchim62 (talk) 23:36, 17 October 2008 (UTC)
Well, the deposit protection scheme isn't supposed to come into play until after the FME has declared that the deposit-taker can't pay. If the deposit protection fund runs out of money I find it hard to believe that other banks have to make up the difference, especially if they have already paid their share to the fund (1% of deposits). The nationalized banks are still limited liability corporations even if they are owned by the government. Their debts can't fall on their owners, the state. --Bjarki (talk) 00:22, 18 October 2008 (UTC)
No deposit protection scheme in the world can cover the collapse of an entire system at once, which is why the government has to back them with liquidity if need be. But once the Icelandic government backs the scheme for Icelandic savers, it also has to do so for savers in other EEA countries, that follows from the "non-discrimination" clause of the EEA Treaty, the very same clause that allowed Landsbanki to be operating a British savings bank under Icelandic regulation (and tax laws). I'm sure that the Icelandic government doesn't exactly want to shout this from the rooftops of Reykjavík at the moment, it has enough problems without that. And it makes sense for the Dutch and British governments to lend the money to Iceland to cover the claims, rather than make a bad situation even worse, because, as you say, Landsbanki had very substantial assets in pounds and euros that merely need a bit of time to be liquidated calmly. Physchim62 (talk) 00:00, 16 October 2008 (UTC)
This article needs a section on the obligations of the Iceland government and its banks, it currently says nothing about this issue. --Ævar Arnfjörð Bjarmason 02:33, 16 October 2008 (UTC)
But once the Icelandic government backs the scheme for Icelandic savers, it also has to do so for savers in other EEA countries, that follows from the "non-discrimination" clause of the EEA Treaty The Icelandic government has explicitly addressed this point. They believe their commitment to fully ensure domestic deposits does not conflict with this clause. Tryggingarsjóður can't discriminate between domestic and foreign deposits but the government can, separately, commit to do whatever it wants. Also note that Tryggingarsjóður has three months to make payments so cannot possibly be considered insolvent now. Haukur (talk) 08:38, 16 October 2008 (UTC)
It was also up to the Icelandic government, in the form of the FME, and the central bank to make sure that Landsbanki wasn't effectively betting the country in the UK savings market. As I said, Landsbanki could have run Icesave as a pair of subsidiaries, as Kaupthing did: in that case, there would have been no claim against the Tryggingarsjóður as the losses would have been covered by the British and Dutch protection schemes. Physchim62 (talk) 23:27, 15 October 2008 (UTC)
Yes, of course that would have been much preferable and, in fact, the Landsbanki was trying to transition to a system like that but was stymied by UK regulators. That's the way they tell the story, anyway. Also, let me assure you that the Landsbanki management is very unpopular indeed in Iceland at the moment. Haukur (talk) 23:32, 15 October 2008 (UTC)
Sounds plausible that the UK FSA was not being helpful, they're not the body with the greatest reputation in the UK! Another problem would have been that virtually any significant change risked sparking a run on Icesave, which is what everyone wanted to avoid: this seems to be why the special liquidity deposits were not imposed either. Physchim62 (talk) 00:00, 16 October 2008 (UTC)
Why would the FSA let an icelandic bank dump billions in liabilities onto british tax payers? (Hypnosadist) 18:39, 16 October 2008 (UTC)
Exactly. The whole thing had become so shaky that any change could have brought it down. Haukur (talk) 08:39, 16 October 2008 (UTC)

Current obligations of banks and state[edit]

This article needs a section on the obligations of the Iceland government and its banks, it currently says nothing about this issue. --Ævar Arnfjörð Bjarmason 02:33, 16 October 2008 (UTC)

Hmm, it would be nice, but it is a little tricky to know what they are! The three parent banks are in administration under a régime of suspension of payments, as are most subsidiaries. Landsbanki in London is continuing commercial banking operations, presumably protected by the Icelandic suspension of payments, but cannot send money back to Iceland for the moment. Glitnir in Finland has been bought out by its local management. Kaupthing in Norway has been taken over by the Norwegian government.
Landsbanki and Glitnir are being reorganised into Nýi Landsbanki and Nýi Glitnir, which are supposed to take on the domestic business and a small amount of international commercial banking. But what will happen to "Old" Landsbanki and "Old" Glitnir? How much debt will be left over once the foreign operations are liquidated? It is excessively optimistic to assume that the liquidation will get 100% of the book value of the assets, but unless those losses are covered by someone it will be impossible for the new entities to operate outside of Iceland. Physchim62 (talk) 09:42, 16 October 2008 (UTC)
Nýi Landsbanki and Nýi Glitnir have already begun operating and are not intended to operate outside Iceland. The old firms will indeed not have assets to cover all their debts. Davíð Oddsson estimated that they would be able to cover 5-15% of their debts. As I understand it, the plan is that no-one will pay the rest. The pension funds are currently in talks to buy Kaupþing so there may never be a Nýja Kaupþing. In Iceland, Kaupþing is widely believed to have been in good shape and to have been brought down unnecessarily by the British Government. Haukur (talk) 09:58, 16 October 2008 (UTC)
Banks from insolvent countries won't be allowed to operate, they need financial regulator to back them up.
The Icelandic state is not insolvent. It has not defaulted on any debt and does not appear to be in danger of doing so. Also, the Icelandic state can run whatever banks it pleases in Iceland. Who is going to "not allow" that? Haukur (talk) 00:54, 17 October 2008 (UTC)
5–15% seems very pessimistic. The estimates in the UK and offshore are that there are liquid assets to cover 30–40% of deposits. Obviously there are other debts as well, but there are also other assets, such as commercial loans, which can't just be liquidated overnight. This press release from Moody's discusses three possible scenarios for the medium term. Physchim62 (talk) 10:24, 16 October 2008 (UTC)
The government has repeatedly said that the assets of Landsbankinn will cover most, but possibly not all, of the deposits which Tryggingarsjóður would be obliged to pay. Presumably that means there will be nothing left for other creditors. Glitnir and Kaupþing are different, of course. Glitnir was probably in very bad shape but Kaupþing probably not. Haukur (talk) 10:32, 16 October 2008 (UTC)
That's pretty much born out by half-year financial statements. Landsbankinn had liquid assets of €7.8bn at the end of June, whereas Glitnir had liabilities of 1,750bn krónur maturing before the end of the year. Kaupthing had managed to reduce its borrowing (in euro terms) during the first six months of the year. All three were carry-trading the króna, taking on deposits in foreign currencies to acquire króna assets, and it's not clear to what extent the positions were effectively hedged. The idea of domestic mortgages linked to the consumer price index must go down as one of the great banking inventions of all time – for the banks, that is, and only for as long as it works, which it probably doesn't any more… Selling mortgages in yen or Swiss francs is also only useful to the bank for as long as the borrowers can actually pay the króna equivalent of the foreign currency: otherwise, the bank is left having to call in the loan, obviously at a loss, while retaining its own foreign currency liabilities. Physchim62 (talk) 12:00, 16 October 2008 (UTC)
Yes, this is all true. Home-buyers could choose between loans in foreign currencies and CPI-linked loans in krónur. Currently the first group is in much more trouble but if we get 75% inflation it's going to be ouch time for everyone. Many people with savings have been using them in the last few days to reduce their home loans. Others have been putting their savings into accounts with CPI-linked interest rates. Haukur (talk) 12:16, 16 October 2008 (UTC)
In the current situation, yes, the people with CPI-linked mortgages are better off, but CPI-linked mortgages only make sense for borrowers at the start of a housing bubble, ie if house prices will rise faster than consumer prices in general. They always made sense for the banks, because the Icelandic CPI is so dependent on the exchange rate. For my rough calculations, I estimate that 47% of the fall in the króna is translated into the CPI, which was the figure for September 2008. CPI-linked mortgages were effectively a hedge on the banks' foreign currency positions, so long as borrowers could actually pay them back. The same rough-and-ready calculations indicate 35% inflation in the coming months at today's exchange rate of 150.5 to the euro: obviously there will be a certain lag period, and there are other factors which will tend to reduce inflation in the medium term. Physchim62 (talk) 12:45, 16 October 2008 (UTC)
The Krona exchange rate is 450 per Euro, if its exchangeable at all. That makes all calculation of of assets/debts impossible.
They make sense when they're your only option. And it's not just the banks, it's Íbúðalánasjóður too. Haukur (talk) 13:16, 16 October 2008 (UTC)
What are Íbúðalánasjóður ? Kittybrewster 11:10, 17 October 2008 (UTC)
The state controlled Housing Financing Fund Haukur (talk) 11:11, 17 October 2008 (UTC)
I didn't mean to imply that they weren't the only option; I was just opining that the Icelandic banks weren't really being fair on Icelanders. The population took all the risk and the banks took all the profit, as I see it. As for the Housing Fund, at least that money stayed (one hopes) within the hands of the collectivity as a whole, so it sort of makes sense (on neo-liberal economic theory at least) that they lent on "market terms". Physchim62 (talk) 11:17, 17 October 2008 (UTC)
Yes, but that turns it around slightly. First we had the HFF with its inflation-linked bonds and then only recently have we had the banks offering those loans too. Remember, the banks were only recently privatized. We've had this indexation thing for a long time, it was instituted after a period of high inflation.
In other news, here's a translated excerpt from the Kastljós interview with Davíð Oddsson the other day: [13] Davíð explains things very plainly. Haukur (talk) 11:30, 17 October 2008 (UTC)

Losses of Icelandic savers[edit]

We still have nothing on the losses of Icelandic savers. Lots of people–and many Icelandic councils–had their savings in money market funds, promoted by the banks as a "save" way to save with a high interest rate. We're talking 245 billion krónur, about half of which may be lost. If this is too arcane a matter for the foreign press to cover we'll have to source it from Icelandic news.[14] [15] Haukur (talk) 12:35, 16 October 2008 (UTC)

Why don't you send a mail to Iceland Review, that way there's more of a chance that it will be picked up by news outlets? My knowledge of Icelandic is less substantial than a share in Glitnir, and I can't really piece something together for the article from the bits and pieces I pick up from English-language blogs (useful as they are to get a general idea of the situation). Physchim62 (talk) 12:56, 16 October 2008 (UTC)
Don't forget that non-english sources can be used in wikipedia-en if it can't be sourced in english. This is exactly the sort of time to do that, so Haukur add whatever info you need to cover the losses of icelanders savings and jobs, i agree it is very undercovered in this article. (Hypnosadist) 18:49, 16 October 2008 (UTC)

Stock collapse[edit]

The Icelandic stock index closed yesterday at 644 points, a new bottom. Its highest value was 9016 points on July 18 2007. Decline: 93% Eat your heart out, Great Depression. Haukur (talk) 09:43, 17 October 2008 (UTC)

That's a 96% drop in euro terms… Luckily the pension schemes only had 9% of their capital in Icelandic shares! (hope I didn't make a translation error on that last one) Physchim62 (talk) 11:30, 17 October 2008 (UTC)
It needs to be pointed out that trading is very thin at the moment, about a million euros a day, no? I'll check this evening once the market's closed and add something appropriate to the article. I'm looking for a source of historical data if anyone happens to know of one. Physchim62 (talk) 11:55, 17 October 2008 (UTC)
It's about half a million euros so far today but it was much less yesterday. There are big swings in the values of stocks after trading of a few thousand ISK. The stock exchange is basically something of a joke at the moment. Haukur (talk) 12:45, 17 October 2008 (UTC)

Nýja Kaupþing[edit]

Pension fund deal falls through - Nýja Kaupþing to be founded early next week.[16] Haukur (talk) 13:23, 17 October 2008 (UTC)

Doesn't surprise me. 1) the pension fund deal was taking too long to negotiate; 2) it wasn't clear what the pension funds would gain from it (apart from contributing to the patriotic effort, which they already have with their assets). Are there really no foreign buyers for Kaupthing? I mentioned that the Belgian government was supposedly interested, although I've not been able to confirm. Physchim62 (talk) 13:33, 17 October 2008 (UTC)
Update: the Belgian government states that "all options remain open, from a capital participation to state guarantee" and it "wants clarification from the governments of Luxembourg and Iceland" [17]. Sounds like it's only talking about Kaupthing Luxembourg, reading between the lines, but the Belgian PM is supposedly in Iceland today. Physchim62 (talk) 13:38, 17 October 2008 (UTC)

This pension-fund/Kaupþing case has now degenerated into a meta-debate about who-said-what-when and just who has the authority to make this decision anyhow. Apparently the FME balked at making a decision of this magnitude and referred the pension funds to the government. Exactly what the government's position is is unclear to me but Björgvin said today that a Nýja Kaupþing would be founded soon and then the pension funds could have a second bite at the apple. I don't really get it. Haukur (talk) 20:33, 18 October 2008 (UTC)

ZOMG, another "who-said-what-when" debate! Seriously, that seems to make more sense that the pension funds buying the whole of Old Kaupthing. The funds get a boring but steady stream of income (something pension funds the world over tend to like), and the government gets somebody else to put up the equity for Nýja Kaupþing. The government has already put 310 billion krónur (24% of GDP) into recapitalising Glitnir and Landsbanki, and that's before they've had to pay for the net assets transferred. Physchim62 (talk) 20:52, 18 October 2008 (UTC)
Yes, it's one big shit sandwich and we're all gonna have to take a bite. I hope they manage to work something out with the pension funds. Haukur (talk) 00:16, 19 October 2008 (UTC)

Landsbanki in London[edit]

The UK Treasury is really tying itself up in knots over the Landsbanki Freezing Order: see this guidance issued today. Yes, you're allowed to trade with Iceland through Landsbanki, yes you're allowed to deal with Landsbanki's London branch (now backed by a £100M loan from the Bank of England so that British high-street stores aren't forced under), but no you must not deal in "frozen funds" (are people supposed to know that these funds are frozen just because they have "ICE" stamped on them?) On the other hand, if they'd sought a Mareva injunction, which would have been the "normal" way, it would probably be even worse now, and for both sides. Physchim62 (talk) 14:25, 17 October 2008 (UTC)

UN Vote just in[edit]

Group C - 2 seats

  • Number of ballot papers: 192
  • Invalid ballots:0
  • Valid ballots:192
  • Abstentions:0
  • Number of members voting:192
  • 2/3 majority: 128
  • Austria: 133
  • Iceland: 87
  • Turkey: 151

Well, that marks the end of that expensive misadventure. Haukur (talk) 15:41, 17 October 2008 (UTC)

This means what? Kittybrewster 15:58, 17 October 2008 (UTC)
That Iceland won't get a seat on the UN security council. Some people blame the financial crisis, others say it was always a doomed effort. Haukur (talk) 16:00, 17 October 2008 (UTC)

This story from Bloomberg (before the vote) gives the background. I shall abstain from other comment. Physchim62 (talk) 16:09, 17 October 2008 (UTC)

Well my comments would include that it was outrageous for Britain to use anti-terrorist legislation against our Icelandic friends. That was never intended by UK parliament. And it was silly of UK not to lend money to Iceland, thereby giving Iceland an incentive to talk to the Russians. UK should have remembered Lease lend. Kittybrewster 16:20, 17 October 2008 (UTC)
1)Its terrorism AND organised crime legislation, and stealing 50 million from the police is organised crime. As for lease lend "The final payment of $83.3 million (£42.5 million) due on 31 December 2006 (repayment having been deferred on several occasions) was made on 29 December 2006," so the iclanders can pay their F'n debts as well. (Hypnosadist) 19:28, 17 October 2008 (UTC)
Um, no-one has stolen anything from anyone (at least not in the 'organised crime' sense) and most probably the British government will make a loan to the Icelandic one. Haukur (talk) 20:14, 17 October 2008 (UTC)
"Um, no-one has stolen anything from anyone" Thats the POV of HM.Gov thats why they used that legislation was used. (Hypnosadist) 21:05, 17 October 2008 (UTC)
Ring-fencing the Icelandic assets while ignoring the liabilities against which they were acquired would be simple theft. Fortunately that's not actually how things are working out. Physchim62 (talk) 21:39, 17 October 2008 (UTC)
Well, it would be nationalization without compensation, i.e. expropriation. But that's not what's going on. Haukur (talk) 22:16, 17 October 2008 (UTC)
I agree; I was careful to make the point in the article, and to reference it ;) . Physchim62 (talk) 22:30, 17 October 2008 (UTC)

Landsbanki receivership[edit]

Landsbanki was placed into receivership by the FME on 7 October, but does anyone know at what time? The UK retail deposits were moved out of Heritable Bank at 9.27 am BST. Physchim62 (talk) 11:05, 18 October 2008 (UTC)

Very early in the day, state media was reporting it at 07:57 GMT.[18] They refer to an announcement from the FME. The FME announcement does not have a timestamp, it links to a TIF file (of all things) which shows the actual legal document. The legal document says the decision is effective immediately but it isn't timestamped either. Maybe there was a timestamp on page two but the TIF file only seems to show the first page. Haukur (talk) 11:26, 18 October 2008 (UTC)

Stock graph[edit]

The graph looks nice but the end is a bit weird, the index is currently close to 600 but in the graph it looks close to zero. Haukur (talk) 11:48, 18 October 2008 (UTC)

Hmm, yes. Not my fault, I didn't draw it, I just found it on the OMX Iceland 15 page! It shouldn't be too difficult to correct that. Physchim62 (talk) 12:23, 18 October 2008 (UTC)
If we can get our hands on the dataset I think a linear graph would be preferable. This isn't like viewing a 100 years of the Dow or something like that, this is all within one order of magnitude (or just about). Haukur (talk) 16:11, 18 October 2008 (UTC)

The opposition[edit]

It is, perhaps, a slight overstatement to say that the opposition parties supported the tapeworm. In the end, some members of the opposition voted for it but mostly they abstained. The promise they had given to the prime minister and which he referred to in his address to the nation was, as I understand it, that they would put no procedural hurdles in the way of the bill, thus allowing it to pass the same day it was presented to the Alþingi. Haukur (talk) 18:15, 18 October 2008 (UTC)

Yep, fair enough, I seem to have gone beyond what the Prime Minister actually said: "I have spoken to the opposition parties and received assurance that the bill will be passed today. I would like to thank them for their cooperation." We need to add in as well the guarantee on domestic deposits, and the fact that the special measured had been deemed unnecessary less than 24 hours earlier. Physchim62 (talk) 18:22, 18 October 2008 (UTC)
Correct. The Progressive Party supported it but the Left-Greens and the Liberal Party abstained. [19] --Bjarki (talk) 18:24, 18 October 2008 (UTC)

Tiny stock rally[edit]

Total volume of trade today was 29,3 million ISK. A couple of very thinly traded stocks went up, causing the index to rise slightly.[20] Haukur (talk) 17:12, 20 October 2008 (UTC)

Nice little list they've got there[edit]

Al-Qaida & Taliban, Belarus, Burma ... Landsbanki ... [21] Haukur (talk) 23:28, 20 October 2008 (UTC)