Banking in the Midnight Sun
We've all been reading about the economic collapse of Iceland. But walking the streets of Reykjavik last night, one thing is certain. Icelanders themselves are in a cranky mood. They are cranky about thinking about how and why it happened. They are cranky about the ridicule. And they are cranky about people talking about it. And they are even crankier about the remedies. Late the night I arrived, the Icelandic Parliament's budget committee agreed on a proposal to repay British and Dutch depositors of the failed Landsbanki, one of Iceland's top three banks that failed in 2008. This they need to do to get IMF bailout funds, and to become eligible for the EU, the Icelandic currency not able to stand on its own. Some of the local protestors have renamed the failed Landsbanki internet Icesave bank scheme Iceslave, since Iceland will be paying back loans from the British (2.3 billion GBP) and Netherlands (1.2 billion euros) for the next 15 years. (The British and Dutch aren't happy about it either.)
An editorial cartoon in the local, and very cranky, English language paper describes the "citizens of the land of imaginary beings [the Easter bunny, Santa Claus, the Yeti, the Loch Ness Monster, and a Unicorn] welcome its newest member: 'Iceland, the Financial Center of the World'". The Easter bunny, as far as we know, was never investigated for financial fraud. Rowena Mason's excellent report in today's Telegraph tells a sad a sordid tale of huge and unsecuritized loans to essentially repurchase shares in a fast game of three-card monte of assets and liabilities intended to deceive the regulators.
We joined the midnight summer sun promenade of locals and tourists and sat opposite the parliament, having an evening meal as the budget committee somberly considered the proposed 15 year hangover that will, if passed, change the culture of this place forever. A morality tale for transparency in business rules if ever there was one.
On the eve of the Icelandic parliaments aggreement to incur a 15 year re-payment scheme for the failed Landskanki Icesave scheme