Iceland March 6, 2009.

To: FSA Information Access Team
c/o Mrs. Sandra Colllins or her representative.

Dear Mrs. Collins.

I refer to my earlier FOI Query, your ref. FOI1152. This is a follow-up query with ongoing reference to the Freedom of Information Act of 2000.

There has been a heated public discussion in Iceland as to the content of the FSA answer to my earlier query. In this discussion allegations have been made that my query was not clear or specific enough and that the FSA had indulged in “beating around the bush” and not giving a fair answer. I find these proclamations unfair but feel it necessary to make things clear and therefor send you these FOI follow-up questions. In light of the aforementioned heated discussion I ask of you to speed up your answers as much as possible.

My follow-up questions, with FOI reference, are the following:

1. Please confirm or deny that ANY discussions and/or negotiations went on between either or both FSA and Icelandic Counterpart FME and/or FSA and Landsbanki (under former ownership), via actual meetings, via telephone, via email or in any other manner, on sunday October 6th 2008 and in the week prior to that (including the Saturday), on either or both subjects:
a) Fast-tracking Landsbanki status as branch/fast-tracking Icesave into UK guarantee-jurisdiction (meaning such a change in 5 working days or about), against a GBP 200 Million transfer into the relevant Deposit Insurance Fund and/or
b) Fast-tracking Landsbanki status as branch/fast-tracking Icesave into UK guarantee-jurisdiction (meaning such a change in 5 working days or about), against a GBP 200 Million transfer into the Landsbanki in UK as liquidity funds against the potential further outflows of customer deposits.

2. Landsbanki former owners/CEO´s have produced (to one Media in Iceland, see: http://visir.is/article/20090304/VIDSKIPTI06/83079011) an email from Landsbanki to FSA (see attachment “Landsbanki email”), dated October 6, time: 01:45 Icelandic time, subject: “Transfer of GBP”. In this email (with names being blocked) a Landsbanki staff-member seems to be referring the FSA to a GBP 200 Million transfer into Landsbanki Branch the morning after “to meet potential further Icesave outflows”, plus further GBP 53 Million into Heritable bank by the end of the day after. This email mentions earlier discussions on these matters, with the recieving person (name blocked) and Mr. Hector Sants.
a) Please confirm or deny that the FSA did get and knows of this particular email.
b) Please explain the reason for this email being sent to the FSA, providing me with emails from the FSA to Landsbanki that have the same reference subject, in the working week and week-end prior to getting the aforementioned email from Landsbanki, as well as providing me with email responses of FSA to Landsbanki because of the aforementioned email.
c) Please explain to me your earlier answer to my FOI query, stating no paper or electronic records found, in light of this Landsbanki email.

3. Please confirm or deny the status of any discussions, negotiations, understanding or agreement concerning the above as FORMAL AND BINDING and/or INFORMAL AND NOT BINDING.

Please confirm forthwith that FSA has recieved this FOI query.
Please answer ASAP in light of heated discussions with accusations that your FOI1152 answer was inaccurate and beating around the bush.

With kindest regards,
Fridrik Thor Gudmundsson (sign)
free-lance journalist, Iceland
tel: +354 552 6365 or +354 864 6365

My blog is clearly marked as a personal opinion blog and I clearly note for all to see that it is neither a news outlet nor an academic one. I may be a free-lance journalist but my blog is not a professional venue.

My enqueries have led to information gathering, reporting and statements by Björgólfur and crew and others. Hence, we are closer to the truth. That is the only thing worth thanking for.

Já ég hef nokkuð góða hugmynd um tóninn í Kastljós fréttinni þar sem ég horfði á hana nánast í beinni útsendingu á netinu, og hef annars þokkalega gott yfirlit um hvað er í fréttum. Ég hef eytt að meðaltali amk kosti 2 klst á dag í íslensku fréttirnar síðan hrunið varð. Ég veit ekki hvort það er eitthvað til að segja frá – það gerir mann hálf truflaðan að lesa um þetta rugl.

Ég skil ekki alveg hvernig fyrirkomulag var á milli þín og Kastljós manna þá, sendir þú bara bréf til Bretlands í eigin nafni, fékkst svar og sagðir Kastljósi frá því? Finnst það kannski ekki mjög traustvekjandi fréttamennska þá af hálfu Kastljós manna en eins og ég sagði áður þá finnst mér gott af þér að opna þetta mál aftur, ég vildi sjálf bíða með að fella dóma þangað til allt er komið í ljós. Ég trúi BTB, en ég trúi líka að aðrir hafi ekki trúað þeirra sögu um fast track, hvorki fyrir né eftir fallið. Kannski er þetta bara ein risa tragísk “úlfur úlfur” saga. Hver veit?

I’m switching over to English for those who cant read Icelandic.

Regarding your reporting, or not. You submit an inquiry to the British FMA and Treasury. The results of that inquiry is then reported in the biggest News Magazine on Icelandic tv. You then continue to write about the issue on your blog, which is not a news paper or a magazine, but is still considered to be a publication of sorts. Sounds like reporting to me, but if you want to find another word for it then please go ahead and let us know what to call it.

If I was at all interested in defending BTB I would go on to say that what he describes in his defense letter published on your blog is something of a cultural difference, not necessarily just between two countries but also of institutions. I find your comment on “language barrier” slightly ironic in that context. I however have no desire to defend BTB so I’m going to stop.

Once again I sing your praise for starting this whole thing. Cant say that often enough.

And yes, there were some Icelanders who saw through the BS all along but nobody paid any attention to them. Much like Paul Krugman and Nouriel Roubini and Doug Noland the bond guy who for years wrote that the American economy made no sense and warned that it would end very badly. And so it has.

RK in Los Angeles; I thank you for the praise, but as for “the reporting” being biased I feel I have to correct you. I have not done any reporting on this. Again: I have not done any reporting on this. So I am innocent of biased reporting!

What I did was send queries to British entities and receive answers. I then offered news magazine show Kastljós the material and it reported it totally without input from me and of course sought opinions and material from former owners of Landsbanki. I, on the other hand, wrote on my personal blog my personal opinion – after the Kastljós reporting. And, again; I have not claimed that BTB is lying about discussions of some sort taking place and have repeatedly said that if he is right then the focus and blame for the huge blunder goes to elected and hired officials. I really don´t care on which side the truth lies: I just want the truth.

Have any of you English-speaking guys a clue as to the content and “tone” of the Kastljós report? Do any of you have a clue as to the debate and information that has been told and published here in Icelandic? Are you aware of the answers and info Ministers have given? Can you guys imagine that perhaps the language barrier precludes you from knowing well enough f. ex. what I have written and said? Are you guys not worried that there may be a factor or two that you are missing? I must wonder about this.

So, even though my knowledge of Iceland is pretty limited, I was cringing through parts of that article, but those weren’t the useful part. A consistent question about the last year or so is “how did this happen,” and he answers a part of that.

As for arrogance, he’s making the explicit case that pursuing an American-style approach to leveraged buy-outs with even less experience than Americans was a path to disaster. When he makes the point about Icelanders deserving another chance, it’s not arrogance, it’s sympathy – but the “one more chance” is just reality.

This is a writer who is still blamed by a former head of Solomons Brothers for costing him his job. Lewis may be patronizing in the fashion of someone whose spent his professional life in major financial centers, but he’s not stupid, and he’s not blind to or an apologist for the failings of the US financial sector.

Unfortunately this story is not available in English. Its basically another story backing up BTB’s claim.

On the whole Icesave fast track thing, I think Friðrik deserves a praise for opening this can of worms again. However I share Batsons feeling that the reporting is biased, and I think that’s unfortunate because I think its really important to try to find the truth in this matter. I also
have the feeling that the truth is somewhere in the very gray area and I hate to say that I actually believe BTB.

I can think of quite a few reasons why the UK Treasury and FMA would be reluctant to disclose information. The first that comes to mind is that they dont want the word to get out that there even is such thing as a fast track. Secondly, its a sensitive matter given the not-so-great relationship between UK and Iceland right now. And thirdly – the wording of Friðriks question or inquiry is, well, wordy. Its not so much a question as a combo of questions and statements in a paragraph. I think when you ask short, concise and perfectly clear questions you get a clear answer. When you approach these people with loaded questions like this it becomes in a way a legal matter, so you have to adjust your approach accordingly. I’m sure everyone in the above mentioned institutions are fully aware of the gravity of the matter and that this has a huge meaning to the Icelandic nation (although that doesn’t seem to be the sentiment in the Icelandic media at all).

Alda I couldn’t agree more on that VF article. Although I think I can somewhat put myself in his shoes and viewed the culture and the crash with foreigners eyes, I think it was a pretty superficial insta-analysis with a dash of obnoxiousness thrown in here and there. I had some serious problems with how he described interactions between Icelandic men and women for example. I also didn’t like it at all when he said that he thought Icelanders deserved another chance but would lose their country if they messed up again. It sounded a bit arrogant to me. Makes me think of throwing rocks from glass houses.