Text 24151, 44 rader
Skriven 2008-11-26 09:52:38 av Robert Bashe (2:2448/44)
  Kommentar till text 24110 av Joe Bruchis (1:3828/12)
Ärende: Iceland
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Joe Bruchis wrote to All on Tuesday November 25 2008 at 12:21:

JB> What's really happening in Iceland? We're only getting a few sound
JB> bytes here. It appears the Government won't let them get their money
JB> from the banks and the shelves are going bear in the grocery stores. I
JB> hear there was a public revolt there yesterday.

All three major banks in Iceland became insolvent and were put under direct
government management. Then the government itself came close to bankruptcy, and
was only saved by a loan from the International Monetary Fund. The loan was
delayed until the very last minute because of political reasons - many UK
citizens had deposits in the Icelandic banks, which had paid particularly high
interest rates, and there was no guarantee that UK citizens would be reimbursed
for their losses - thus, the UK blocked the loan for quite a while. I haven't
heard what compromise was reeached, but now hear that all depositors will be
recompensed (at some time and how much is the question - the EU only specifies
that deposits are guaranteed up to EUR 20,000 (in Germany, the amount is much
higher if the bank belongs to a bank security fund, which most do).

The German government has now also agreed to provide a loan to Iceland, for
reasons including self interest, since many Germans also had accounts in one of
the Icelandic banks. As I hear, the Scandanavian countries are also going to
make a loan to Iceland.

No, there is not general panic in Iceland, the food supplies are not drying
upnand there is no longer the risk of national bankruptcy. But the situation
was and remains very precarious, and the Icelandic Crown has dropped in value
against the Euro by around 50% in the last months.

JB> Gee, weren't they one of the top 5 wealthiest countries in the World?

Not to my knowledge.

JB> Will this spread to other countries/nations?

Your guess is as good as mine, but I think not. Iceland had a special
situation, where the banks were attracting a lot of foreign capital by paying
high interest rates (from high-risk investments, logically enough), and simply
didn't have the financial mass to withstand the crisis when it came.

Cheers, Bob

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