Martin Wolf in China, 2007

Martin Wolf, associate editor of British newspaper the Financial Times, says he thinks there’s nothing wrong with the fact that Icelanders are holding onto the Icelandic króna, the “smallest currency in the world”, and thinks that the króna has served Icelanders well. As of the time of writing, there are 182 krónur to the pound sterling, 158 to the euro and 114 to the US dollar.

Wolf presided over a meeting this evening with VÍB, the asset management arm of Íslandsbanki. He says he doesn’t see an advantage for Iceland in joining the EU, where he believes the country would have no influence and would have to relinquish control of important resources.

Addressing the audience he said, “I have to ask those of you who want this, have you not been following what is currently going on in the Union?”, which was received with a cry of laughter.

He went on to say that people shouldn’t forget that if they adopt another currency then they need to come to terms with the fact that the exchange rate will not always move in their favour, and that [Icelandic] society would have to possess enormous flexibility.

Amongst the others who were in attendance at the meeting were Vilhjálmur Egilsson, the CEO of Samtaka atvinnulífsins, Katrín Ólafsdóttir, a lecturer at the University of Reykjavík and Heiðar Már Guðjónsson, an investor.

Source: Morgunblaðið
Image: Wikipedia

Labels: Banking, Economy, UK

On 31 May, the Central Bank of Iceland (officially Seðlabankinn) announced a transaction that bolstered its foreign currency reserves by a whopping 17%. The 26 public pension funds of Iceland were invited to a closed auction of Housing Finance Fund (HFF or Íbúðalánasjóðurinn) bonds, where they were sold for a total of €549m. The pension funds will sell off foreign assets to finance the foreign-denominated transaction.

Labels: Banking, Economy, Kreppa

In the least shocking ruling of all time (all time!), the European Free Trade Association (EFTA) has decided that Iceland has a legal responsibility to pay the British and the Dutch governments the minimum deposit guarantee for Icesave accounts opened in those countries. This means that the Icelandic government, via the deposit fund, is liable for a maximum of €20,000 per depositor, or approximately €5bn. The bank behind Icesave, Landsbanki Íslands, was nationalised in 2008 during the global financial crisis.

Labels: Banking, icesave

Sigurður Einarsson, the former director of Kaupþing Bank, will not return to Iceland voluntarily for questioning by the Special Prosecutor. He is now part of a rather exclusive club of Icelanders who appear on Interpol's wanted list.

Sigurður said in a phone interview with Fréttablaðið today that he was surprised by these events. He said that it surprised him that people were arrested immediately upon arrival in Iceland, and that these arrests and custody rulings were, to his knowledge, completely unfounded. One wonders if, living in Britain, he has simply failed to get his hands on a copy of Iceland's "Black Report" which details, among other things, exactly what these arrests are based on.

He also told Fréttablaðið that he does not intend to take part in a play that, to him, seems made to mollify the Icelandic nation. He says he is going to rely on the human rights of Britain, where he currently resides.

Source: http://www.ruv.is/frett/kemur-ekki-otilneyddur-0

Labels: Banking, Crime, Kreppa